Asset Revaluation Reserve - Held to maturity investment (revaluation increment o

Question

Asset Revaluation Reserve - Held to maturity investment (revaluation increment on 30/06/2017 after tax deduction)

21,000

Asset Revaluation Reserve - Land (revaluation increment on 30 June 2017 - after tax deduction

168,000

How to calculate the comprehensive income given tax is at 30%

how do i find the original gain revaluation in land and equity equipment before the 30% tax is applied?

Asset Revaluation Reserve - Held to maturity investment (revaluation increment on 30/06/2017 after tax deduction)

21,000

Asset Revaluation Reserve - Land (revaluation increment on 30 June 2017 - after tax deduction

168,000

Explanation / Answer

After tax deduction of 30%, net increase in Value of Investment is 21000 which is equivalent to 70% , so total increase in Value of Investment = 21000/70% = 30000 & Tax = 30% of 30000 = 9000

Similarily, after tax deduction of 30%, net increase in Value of Land is 16800, which is equivalent to 70%, so total increase in value of land = 168000/70%= 240000 & tax = 30% of 240000 = 72000

Other comprehensive income: Items that will not be reclassified to profit or loss Gain arising during the year on revaluation of land 240000 Gain arising during the year on investments in equity instruments 30000 270000 Income tax relating to items not reclassified(30%) 81000 Other comprehensive income during the year, net of tax 189000

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