The tax expense

is correctly calculated to be C60 000, constituted by a current tax

expense and a deferred tax adjustment. The current tax for the current year was

C40 000.

Select one:

Select the most correct answer:

The standard on impairment of assets (IAS 36) does not apply to certain assets, including, for example:

Fill in the missing amount:

A factory plant has an expected selling price of C220 000 if sold at reporting date, where this selling price was determined based on the selling prices of identical assets in an active market. Legal costs of C10 000 would be incurred in order to sell this asset. Costs to reorganise the factory after the sale of the asset would be C20 000. The fair value less cost of disposal would be  how much?

Indicate whether the following is true or false:

 An investment property, consisting of land, which was purchased for C100 000 on 1 January 20X1 is remeasured to its fair value of C120 000 at year-end, 31 December 20X1. Management intends to keep this land and use it as a parking lot to generate rent income.

The income tax rate is 30%.

The land’s base cost is C105 000.

The relevant capital gains inclusion rate is 66,6%.  

The cost of the land is not deductible for tax purposes.

 The deferred tax liability balance at year-end should be:

Select the most correct answer:

 An item of property plant and equipment had a carrying amount of C30 000 at reporting date (before performing the review for indications of impairment).

The impairment indicator review at reporting date suggested that this asset could possibly be impaired. The recoverable amount was then estimated to be C25 000 at reporting date.

At the same time, the useful life was re-estimated and found to be shorter than the useful life that had been used for purposes of calculating the asset’s depreciation. Had this shorter useful life been used instead, the carrying amount at reporting date would have been C28 000 (i.e. not C30 000). All amounts are considered to be material.

How do we account for this transaction?

An entity using the fair value model for its investment property acquired an investment property for C100 000 on 1 January 20X1 and proceeded to develop it into an office block to be rented out to tenants under operating leases. The cost of construction was C200 000 by 31 December 20X1 and further construction costs of C50 000 were incurred by 31 July 20X2 when the property was completed. A fair value was not reliably measurable on this date and the entity determined that fair values would never be reliably measurable.

The property was available for use on 1 October 20X2. 

Despite predictions in July 20X2 that fair values would never be reliably measurable, a reliable measure of the fair value for this property was obtained for the first time on 31 December 20X3: the fair value on this date was C400 000.

The property is expected to have a useful life of 20 years and a residual value of C30 000.

The carrying amount of the property at 31 December 20X3 will be CAnswer

E

ntity A has a profit before tax of

C100 000, included in which are the following items:

·        

·        

There are no temporary differences and thus no deferred tax.

The tax authorities:

·        

·        

·        

There is no further information that would affect tax expense for the

period

Select the correct answer:

Entity A’s tax

expense will be:

Select the most correct answer:

The recoverable amount of an asset is:

Select the most correct answer:

 Joy Limited incurred the following amounts on an office building classified as investment property:

·         C150 000 to build three extra offices

·         C50 000 to install a new lift

·         C20 000 to repaint.

 The total amount that may be capitalised is:

Select the most correct statement:

The revaluation of an asset results in an increase in its carrying amount by C100 000. This revaluation increase was correctly accounted for as a revaluation income, in profit or loss, of C20 000 and a revaluation surplus, in other comprehensive income, of C80 000.  

This revaluation will result in the following income being included in the calculation of total comprehensive income for the period: