financial statements

On 1 January 20X8 Simone Ltd decided to revalue its land for the first time. A qualified property valuer reported that the market value of the land on that date was $80,000. The land was originally purchased 6 years ago for $65,000. Simone does not make a transfer to retained earnings in respect of excess depreciation on the revaluation of its assets. The required provision for income tax for the year ended 31 December 20X8 is $19,400. The difference between the carrying amounts of the net assets of Simone (including the revaluation of the property in note (above) and their (lower) tax base at 31 December 20X8 is $27,000. The opening balance on the deferred tax account was $2,600. Simone’s rate of income tax is 25%. Required: Prepare extracts of the financial statements to show the effect of the above transactions.