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ESunday, October 5Clear, 69°FMy wife, Eleanor, and I took the train from Paris to Strasbourg, where we were met by our driver and guide, and the minibus which goes along with the boat. We stopped off in Barn for an hour on the way. Then we were taken to N

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Sunday, October 5

Clear, 69°F

My wife, Eleanor, and I took the train from Paris to Strasbourg, where we were met by our driver and guide, and the minibus which goes along with the boat. We stopped off in Barn for an hour on the way. Then we were taken to Nancy where the boat was kept.

After the other passengers arrived, we had our first dinner on the boat. After dinner we walked into downtown Nancy, a village with a large square and wooden houses.

Monday, October 6

Rained last night, cloudy in the morning, 69°F

We spent about two hours in Nancy, then sailed on the Canal de la Marne au Rhine. Kind of a lazy day, eating breakfast, lunch, and dinner. After dinner we watched a tape on Baccarat, where we will visit tomorrow.

It was pleasant to sit out on deck (甲板) and watch the scenery go by at about 3 mph.

Tuesday, October 7

Light rain, 64°F

This morning we drove over to Baccarat and toured its museum and the church, which has this unbelievable lamp that is going on a world tour the next day. We did lots of shopping, then walked across the bridge to see a very, very modern Catholic church with special Beccarat windows.

We drove to the top of the Voges Mountains and started down the eastern side, Later we drove to Sorrenbourg to see the 13th century church at the Cordeliers. It contains the largest window by Marc Chagall – 24 feet wide by 40 feet high.

Wednesday, October 8

Cloudy, 65°F

Today we sailed from Schneckenbush to Saverne. We went through two caves, an extremely unusual part of the journey. This river scenery is very different. We were in a mountain valley with grassland on one side and a forest beginning to show some color on the other.

Thursday, October 9

Cloudy, 66°F

Our dependable minibus was waiting to load the luggage and take us to the hotel where everyone went their separate ways. Our boating days are over until next time.

72. Where did the author get off the train?

A. Paris. B. Strasbourg. C. Nancy. D. Barn.


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4.Additionally the directors wish to know how the provision for deferred taxation would be calculated in the followingsituations under IAS12 ‘Income Taxes’:(i) On 1 November 2003, the company had granted ten million share options worth $40 million subject to a twoyear vesting period. Local tax law allows a tax deduction at the exercise date of the intrinsic value of the options.The intrinsic value of the ten million share options at 31 October 2004 was $16 million and at 31 October 2005was $46 million. The increase in the share price in the year to 31 October 2005 could not be foreseen at31 October 2004. The options were exercised at 31 October 2005. The directors are unsure how to accountfor deferred taxation on this transaction for the years ended 31 October 2004 and 31 October 2005.(ii) Panel is leasing plant under a finance lease over a five year period. The asset was recorded at the present valueof the minimum lease payments of $12 million at the inception of the lease which was 1 November 2004. Theasset is depreciated on a straight line basis over the five years and has no residual value. The annual leasepayments are $3 million payable in arrears on 31 October and the effective interest rate is 8% per annum. Thedirectors have not leased an asset under a finance lease before and are unsure as to its treatment for deferredtaxation. The company can claim a tax deduction for the annual rental payment as the finance lease does notqualify for tax relief.(iii) A wholly owned overseas subsidiary, Pins, a limited liability company, sold goods costing $7 million to Panel on1 September 2005, and these goods had not been sold by Panel before the year end. Panel had paid $9 millionfor these goods. The directors do not understand how this transaction should be dealt with in the financialstatements of the subsidiary and the group for taxation purposes. Pins pays tax locally at 30%.(iv) Nails, a limited liability company, is a wholly owned subsidiary of Panel, and is a cash generating unit in its ownright. The value of the property, plant and equipment of Nails at 31 October 2005 was $6 million and purchasedgoodwill was $1 million before any impairment loss. The company had no other assets or liabilities. Animpairment loss of $1·8 million had occurred at 31 October 2005. The tax base of the property, plant andequipment of Nails was $4 million as at 31 October 2005. The directors wish to know how the impairment losswill affect the deferred tax provision for the year. Impairment losses are not an allowable expense for taxationpurposes.Assume a tax rate of 30%.Required:(b) Discuss, with suitable computations, how the situations (i) to (iv) above will impact on the accounting fordeferred tax under IAS12 ‘Income Taxes’ in the group financial statements of Panel. (16 marks)(The situations in (i) to (iv) above carry equal marks)

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