The following incomplete balance sheet relate to Concorde Ltd for the years ended 31 December 2007:

      

The following incomplete balance sheet relate to Concorde Ltd for the years ended 31 December 2007:
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Additional information:
1. The company reported an accounting profit before tax of sh.60 million for the year ended 31 December 2007. This profit was arrived at as shown below:
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2. The company declared a dividend of sh.10 million for the year ended 31 December 2007.
3. Depreciation on plant and equipment is provided at the rate of 20% on straight-line basis. Plant and equipment qualify for capital allowances at the rate of 25% of cost on straight –line basis.
4. Accumulated tax depreciation as at 31 December 2006 was sh.50 million. On 1 February 2007, the company purchased additional costing sh.150 million. The company’s policy is to charge a full year’s depreciation in the year of purchase and none in the year of disposal.

5. Included in selling and distribution expenses is sh.5 million representing an expense which was disallowed by the tax authorities.
6. The company charged the income statement with sh.14 million representing pension costs for the year ended 31 December 2007. Sh.11.5 million of this amount was allowed for tax purposes.
7. The company made a general provision for bad debts of sh.3 million for the year ended 31 December 2007. There were no bad debts written off during the year.
8. On 31 July 2007, the company made a tax payment of sh.15 million.
9. Corporation rate of tax is 30%.
10. The company separately accounts for deductible and taxable temporary differences.

Required:
i) Determine the charge in the income statement for current tax and deferred tax expenses.
ii) Prepare the income statement showing the retained profit balance.
iii) Prepare the complete balance sheet.

  

Answers


Martin
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marto answered the question on February 14, 2019 at 06:50


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