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Rowen recognised a deferred tax liability for the year ended 31 December x4 which is related solely to a difference between rates of capital allowance and depreciation. The carrying amount of plant and equipment was RM30 million and tax written down value was RM20 million. Tax rate is 30%.

The following transactions took place during x5:

a. During the year, plant was revalued and surplus RM5 million. At the end of the year, the carrying amount of plant was RM42 million and tax written down was RM25 million. Gains on revaluation are taxable on sale at 20%.

b. Development expenditure of RM12 million was capitalised accordance with MFRS 138 but is deducted for tax purpose. There was no amortisation during the year.

c. Rowen has recognised income receivable of RM2 million but none has been received yet.

d. Rowen has made provision for environment clean-up of RM1 million. The expenditure will be tax deductible when paid only.

e. The trade receivables were disclosed at RM3.5 million after providing for doubtful debts of RM250,000.

f. Financial instruments were classified as at fair value through profit of loss of RM8 million. The cost of these financial instruments was RM7 million.

g. The tax payable for the year was calculated at RM3.3 million.

Required:

a. Prepare a table showing the carrying amounts tax base and temporary differences for each of the items above as at 31 December x5.

b. Calculate the amount of tax expense as charged in the statement of profit or loss and other comprehensive income and the amount disclosed in the deferred tax liability in the statement of financial position as at 31 December x5.

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