Use the Following Information to Answer Questions
an Extract

question 13

Multiple Choice

Use the following information to answer questions
An extract of a company's draft statement of financial position at 30 June 2012 discloses the following:
$\begin{array} { l r r } \text { Plant (at cost) } & \$ 500,000 & \\\text { Less Accumulated Depreciation } & \underline { 300,000 } & \$ 200,000\end{array}$

On 30 June 2013 the company assessed the fair value of the plant to be $350 000. At 30 June 2014, the carrying amount of the Plant was $250 000.
The tax rate is 30%. Depreciation rates are 10% p.a. (accounting) and 12.5% p.a. (tax) using the straight-line method.
-The journal entries to adjust for the tax effect of the revaluation at 30 June 2013 is:

• A)\(\begin{array} { c l l l }
• \text { Income tax expense - OCI } & \mathrm { Dr } & 45,000 & \\
• \text { Deferred tax liability } & \mathrm { Cr } & & 45,000
• \end{array}\)
• B)\(\begin{array} { l l l l }
• \text { Asset revaluation surplus } & \mathrm { Dr } & 45,000 & \\
• \text { Income tax expense - OCI } & \mathrm { Cr } & 45,000
• \end{array}\)
• C)\(\begin{array} { c l l l }
• \text { Income tax expense } - \text { OCI } & \mathrm { Dr } & 45,000 & \\
• \text { Asset revaluation surplus } & \mathrm { Cr } & 45,000
• \end{array}\)
• D)\(\begin{array} { l l r r }
• \text { Income tax expense - OCI } & \mathrm { Dr } & 45,000 & \\
• \text { Deferred tax liability } & \mathrm { Cr } & 45,000 \\
• & & & \\
• \text { Gain on revaluation - OCI } & \mathrm { Dr } & 150,000 & \\
• \text { Income tax expense - OCI } & \mathrm { Cr } & 45,000 \\
• \text { Asset revaluation surplus } & \mathrm { Cr } & 105,000
• \end{array}\)

---

Definitions:

Uterine Contractions

Involuntary muscle contractions of the uterus, key in the menstrual cycle and childbirth.

Longer Delivery Time

An extended duration of labor or the process of childbirth, which may increase the risk for complications for both the mother and the infant.

First Stage

The initial phase or beginning of a process, event, or development.

Childbirth

The process of delivering a baby from the mother's uterus to the outside world.