44. An entity has revalued its property and has recognized the increase in the revaluation reserve in its financial statements. The carrying value of the property was GHS8 million, and the revalued amount was GHS10 million. Tax base of the property was GHS6 million. In the country, the tax rate applicable to profits is 35% and the tax rate applicable to profits made on the sale of property is 30%. Where will the tax liability be recognized and at what amount? (a) In the income statement at GHS600,000. (b) In equity at GHS1.2 million. (c) In statement of recognized income and expense at GHS1.4 million. (d) In retained earnings at GHS700,000. 45. The current liabilities of an entity include fines and penalties for environmental damage. The fines and penalties are stated at GHS10 million. The fines and penalties are not deductible for tax purposes. What is the tax base of the fines and penalties? (a) GHS10 million. (b) GHS3 million. (c) GHS13 million. (d) Zero.

44. An entity has revalued its property and has recognized the increase in the revaluation reserve in its financial statements. The carrying value of the property was GHS8 million, and the revalued amount was GHS10 million. Tax base of the property was GHS6 million. In the country, the tax rate applicable to profits is 35% and the tax rate applicable to profits made on the sale of property is 30%. Where will the tax liability be recognized and at what amount? (a) In the income statement at GHS600,000. (b) In equity at GHS1.2 million. (c) In statement of recognized income and expense at GHS1.4 million. (d) In retained earnings at GHS700,000. 45. The current liabilities of an entity include fines and penalties for environmental damage. The fines and penalties are stated at GHS10 million. The fines and penalties are not deductible for tax purposes. What is the tax base of the fines and penalties? (a) GHS10 million. (b) GHS3 million. (c) GHS13 million. (d) Zero.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter25: Taxation Of International Transact Ions

Section: Chapter Questions

Problem 32P

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