Answer:-
Situation ( $ in thousands ) |
|||||
1 |
2 |
3 |
4 |
||
A) |
Income tax payable (Note 1 ) |
$ 35.6 |
$ 89.2 |
$ 82 |
$ 108.8 |
B) |
Deferred Tax Asset- Balance (Note 2) |
$ 6.4 |
$ 8.4 |
$ 8.4 |
|
C) |
Deferred Tax Asset- Change (Note 3) |
$ 4. 2 |
- $1.6 |
$ 4 |
|
D) |
Deferred Tax Liability- Balance (Note 4) |
$6. 4 |
$6. 4 |
$ 12.8 |
|
E) |
Deferred Tax Liability- Change (Note 5 ) |
$4.2 |
$4. 2 |
$ 12.8 |
|
F) |
Income Tax Expense (Note 6) |
$ 31.4 |
$ 93.4 |
$ 87.8 |
$ 117.6 |
Explanation : |
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Notes : |
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Situation ( $ in thousands ) |
|||||
1 |
2 |
3 |
4 |
||
1) |
Income tax payable = Taxable income * Tax rate |
$ 35.6 |
$ 89.2 |
$ 82 |
$ 108.8 |
($ 89 *40%) |
($ 223*40%) |
($ 205*40% ) |
($ 272*40%) |
||
2) |
Deferred Tax asset-Balance= Future deductible amounts * tax rate |
$ 6.4 |
$ 8.4 |
$ 8.4 |
|
($ 16*40%) |
($ 21*40%) |
($ 21*40%) |
|||
3) |
Deferred Tax asset-Change= Deferred Tax asset-Balance - Deferred |
$4. 2 |
- $1.6 |
$ 4 |
|
Tax asset at the beginning of the year |
($ 6.4- $2.2) |
($ 8.4$-10 ) |
($ 8.4- $4.4 ) |
||
4) |
Deferred Tax Liability-Balance= Future Taxable amounts * tax rate |
$ 6.4 |
$ 6.4 |
$ 12.8 |
|
($ 16*40%) |
($ 16*40%) |
($ 32*40%) |
|||
5) |
Deferred Tax Liability-Change= Deferred Tax Liability-Balance - Deferred |
$4.2 |
$4. 2 |
$ 12.8 |
|
Tax Liability at the beginning of the year |
($6. 4 - $2.2 ) |
($ 6.4- $2.2) |
($ 12.8- $0 ) |
||
6) |
Income tax expense = (Income tax payable + Deferred tax |
$ 31.4 |
$ 93.4 |
$ 87.8 |
$ 117.6 |
Liability -Change) - (Deferred Tax asset -Change ) |
{($ 35.6+0)-$4.2 )} |
{($89.2+ $4.2) -$ 0) } |
{($ 82+$4.2)-(- $1.6))} |
{($108.8+$12.8)-($4)} |
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