On 30 June 2014, Walters Limited Had an Item of Plant

question 3

Short Answer

On 30 June 2014, Walters Limited had an item of plant with an original cost of $140 000 and accumulated depreciation of $56 000. At this date, the fair value of the plant was $100 000 and Walters Limited revalued the plant. Assuming a tax rate of 30%, the tax effect of the revaluation would be recorded as which of the following? $$\begin{array} { l l l l } \text { Ircome tax expendse - OCI } & \text { Dr } & 4800 \\\quad \text { Currert tax liability } & \text { Cr } & & 4800 \\\\\text { Deferred tax asset } & \text { Dr } & 4800 \\\text { Incorne tax expense - OCI } & \text { Dr } && 4800 \\\\ \text { Deferred tax asset }& \text { Dr } & 4800 \\\text { Currert tax liability }& \text { Cr } & & 4800\\\\\text { Income tax expense - OCI } & \mathrm{Dr} & 4800 \\\text { Deferred tax liability } & \mathrm{Cr} & & 4800 \end{array}$$

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Definitions:

Strategy

A plan of action designed to achieve a particular goal or series of goals within competitive situations or under conditions of uncertainty.

Informal Social Relations

Informal interactions and connections that occur in society outside of formal institutions and structures.

Rosabeth Moss Kanter

An influential American academic specializing in business management practices, particularly around change management and organizational behavior.

Corporation

A legal entity distinct from its owners, with its own rights and obligations, capable of conducting business, owning assets, and incurring liabilities.