Question

Happy Mart Sdn Bhd acquired an equipment in Year 2016 for RM100,000 and depreciates it on a straight-line basis over its expected useful life of five years. The equipment has no residual value. For tax purposes, the equipment is depreciated at 25% per annum on a straight-line basis. Tax losses may be carried back against taxable profit of the previous five years. In year 2015, the entity's taxable profit was RM25,000. The tax rate is 20%.

Required:- Assuming nil profits/losses after depreciation in years 2016 to 2020, show the current and deferred tax impact in years 2016 to 2020 of the acquisition of the equipment.

Year	2016	2017	2018	2019	2020
Taxable income
Depreciation for tax purposes
Taxable profit (tax loss)
Current tax expense (income)
Year	2016	2017	2018	2019	2020
Carrying amount
Tax base
Taxable temporary difference
Opening deferred tax liability
Deferred tax expenses (income):
Closing deferred tax liability

Answer 1

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