QUIZ 1

ACT 3101 FINANCIAL ACCOUNTING AND REPORTING 3

The following information is extracted from the financial statements of Novogratz Berhad as
at 31 December 2014.
Novogratz Berhad
Statements of Financial Position as at 31 December 2014
RM'000
Assets
Cash
Account receivables (net)
Rental receivables
Inventory
Plant (net)
Investment property
Development cost
Totals
Liabilities and shareholders' equity
Account payables
Other payables
Provision for repairs
Deferred tax liability
Loans
Ordinary share capital
Revaluation reserve
Retained earnings
Totals

2,700
3,500
2,000
8,800
8,000
15,000
8,000
48,000
2,600
2,500
180
450
2,000
10,000
3,000
27,270
48,000

Additional information for relevant assets and liabilities:

a) The account receivables are disclosed after providing for general provision for doubtful
debts of RM250,000. However, tax rules only allow specific bad debts.
b) Novogratz Berhad has recognized rental receivable of RM2,000,000 as it is the policy
of the company to accrue rental income on a time basis. However, rental income is
taxable only upon receipt.
c) Plant, which is disclosed after providing for accumulated depreciation of RM800,000,
does not enjoy any tax relief or capital allowances.
d) During the year, Novogratz Berhad has revalued its investment property and recognized
the revaluation surplus in the revaluation reserve. The propertys carrying amount is
RM12,000,000 and the revalued amount is RM15,000,000. There is no commitment to
dispose the property in the near future. The investment property is accounted using the
fair value model.

QUIZ 1
ACT 3101 FINANCIAL ACCOUNTING AND REPORTING 3
e) Development costs of RM8,000,000 are capitalized in accordance with MFRS 138.
However, the cost is deducted for tax purpose. There is no amortization for the
development cost during the year.
f) Other payables include fines and penalties of RM1,000,000. Fines and penalties are not
deductible for tax purpose.
g) Novogratz Berhad has made provision for repairs of RM180,000. However, tax rules
only allow cash spent on actual repairs.
h) The balance in the deferred tax liability account is the carried forward closing balances
from the prior year.
Required:
Prepare a table showing the carrying amount, tax base and temporary differences for all the
assets and liabilities in the given Statement of Financial Position. Assuming that the income
tax rate for year 2014 is 25%, compute the deferred tax of Novogratz Berhad for the year ended
31 December 2014.

QUIZ 1
ACT 3101 FINANCIAL ACCOUNTING AND REPORTING 3
CA
TB
2700
2,700
3750
3,500
0
2,000
8800
8,800
8800
8,000
12000
15,000
0
8,000
2600
2,600
1500
2,500
0
180
450
450
2000
2,000
Total temporary differences
DTL/DTA (@ 25%)
DTL*
DTA*
Temporary differences
Less: opening balances
Charged in income statement
* Half mark if working is shown but figure is wrong
Cash
Account receivables (net)
Rental receivable
Inventory
Plant (net)
Investment property
Development cost
Account payables
Other payables
Provision for repairs
Deferred tax liability
Loans

TTD

DTD
250

2,000
800
3,000
8,000

180

13,000
3,250
3,250
307.5
2,942.5
450
2,492.5

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1230
307.5
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(1 / x 1 mark = 15 marks)