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On 1 January 20X8 Simone Co decided to revalue its land for the first time....

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Accounting

On 1 January 20X8 Simone Co decided to revalue its land for the first time. A qualified property
valuer reported that the market value of the land on that date was $80,000. The land was
originally purchased 6 years ago for $65,000.
The required provision for income tax for the year ended 31 December 20X8 is $19,400. The
difference between the carrying amounts of the net assets of Simone (including the revaluation of
the land above) and their (lower) tax base at 31 December 20X8 is $27,000. The opening balance
on the deferred tax account was $2,600. Simones rate of income tax is 25%.
Required:
Prepare extracts of the financial statements to show the effect of the above transactions.

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