Mazelane controls three subsidiaries and the timing of reversal for each. A: taxable difference of 900,000, profits reinvested indefinitely. B: taxable difference of 400,000, sale decided for 20X7. C: deductible difference of 300,000, no foreseeable sale or liquidation. Gains and losses are taxed at 25% (data); taxable profit is sufficient. Compute the liability, the asset and the amount of taxable differences to be disclosed with no liability.
- Subsidiary A: taxable difference (no reversal planned)
- 900,000
- Subsidiary B: taxable difference (sale decided)
- 400,000
- Subsidiary C: deductible difference (no foreseeable sale)
- 300,000
- Rate applicable to gains and losses on disposal (%)
- 25 %