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DEC 13 Q2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › DEC 13 Q2

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • December 17, 2017 at 3:56 am #423780
    Mariam
    Member
    • Topics: 11
    • Replies: 11
    • ☆

    Hi Mike,

    Thanks for the help in the previous question. In Q2, how was the deferred tax on revaluation computed?

    Thanks,

    Mariam.

    December 17, 2017 at 4:50 am #423783
    Mariam
    Member
    • Topics: 11
    • Replies: 11
    • ☆

    Also, how did we compute the value of $11870 for the retained earnings?

    Regards,

    Mariam.

    December 17, 2017 at 8:21 am #423796
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23309
    • ☆☆☆☆☆

    According to the trial balance as at 1 October, 2012, land had a value at cost of $12 and buildings a value of $48 at cost

    In addition, as at 1 October, 2012, there was accumulated depreciation on the buildings of $10 giving a net book value on the buildings of $38

    Then comes the revaluation as at 1 October, 2012 and land is revalued to $16 and the buildings to $38.4 giving a revaluation surplus of $4.4

    For the purposes of deferred tax, this surplus is multiplied by the current corporate tax rate of 25% giving us a figure of $1,100

    OK on that?

    “how did we compute the value of $11870 for the retained earnings?”

    $11,870 is the figure for profit after tax for the year as shown in the answer to part a)

    OK?

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  • The topic ‘DEC 13 Q2’ is closed to new replies.

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