Question 3. The following information is given in respect of Transport ple:a) Non-current assets consist entirely of plant and machinery. The net book value is £1,100,000and the tax written down value after capital allowances (tax base) is £1,000,000.b) The provision for deferred taxes (all of which relates to fixed assets timing differences) on30/06/2010 was £21,000.c) The company's capital expenditure forecasts indicate that capital allowances and depreciationin future years will be:Year ended 30th June(£)2011Depreciation charge for year(£)12,00014,00020,00040,00044,00046,000Capital Allowances for year(£)53,00049,00036,00032,00032,00036,00020122013201420152016For the following years, capital allowances are likely to continue to be in excess of depreciation forthe foresecable future.d) Corporation tax is to be taken at 21%.Required: Calculate the deferred tax charges or credits for the next six years, commencing with yearended 30/06/2011, in accordance with the provisions of IAS 12.

A deferred liabilities may be a item on a company's record that records taxes that are owed but…

Question 3. The following information is given in respect of Transport plc: a) Non-current assets consist entirely of plant and machinery. The net book value is £1,100,000 and the tax written down value after capital allowances (tax base) is £1,000,000. b) The provision for deferred taxes (all of which relates to fixed assets timing differences) on 30/06/2010 was £21,000. c) The company's capital expenditure forecasts indicate that capital allowances and depreciation in future years will be: Year ended 30th June (£) 2011 2012 2013 2014 Depreciation charge for year (£) 12,000 14,000 20,000 40,000 44,000 46,000 Capital Allowances for year (£) 53,000 49,000 36,000 32,000 32,000 36,000 2015 2016

Question 3. The following information is given in respect of Transport plc: a) Non-current assets consist entirely of plant and machinery. The net book value is £1,100,000 and the tax written down value after capital allowances (tax base) is £1,000,000. b) The provision for deferred taxes (all of which relates to fixed assets timing differences) on 30/06/2010 was £21,000. c) The company's capital expenditure forecasts indicate that capital allowances and depreciation in future years will be: Year ended 30th June (£) 2011 2012 2013 2014 Depreciation charge for year (£) 12,000 14,000 20,000 40,000 44,000 46,000 Capital Allowances for year (£) 53,000 49,000 36,000 32,000 32,000 36,000 2015 2016

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 11DQ

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