Trevelyan was incorporated on 1 January 2004. On 10 January, equipment for EUR 48,000 and motor vehicles for EUR 12,000 were acquired. In the year ended 31 December 2004 the enterprise made a profit before taxation of EUR 121,000. This figure was after a depreciation charge of EUR 11,000. For tax purposes, the depreciation was EUR 15,000 (25 per cent of the original cost). Corporate tax rate was of 30 per cent.
(a) Calculate the income tax liability for the year ended 31 December 2004.
(b) Calculate the deferred tax balance to be recorded in the balance sheet as at 31 December 2004.
(c) Prepare a note showing the movement on the deferred tax account and thus calculate the deferred tax charge for the year ended 31 December 2004.
(d) Prepare the income statement note which shows the computation of the tax expense for the year ended 31 December 2004.
(e) Prepare a note which reconciles accounting profit multiplied by the applicable tax rate and the tax expense.
(f) Prepare a balance sheet note showing the movement on deferred tax in respect of each type of temporary differences.