(1 point) When does temporary differences occur? (1 point) When does deferred tax liability occur? (1...
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(9 points) Jackson Ltd commenced trading on 1 July 20X7. For the year ending 30 June 20X8 net profit before tax was $92000. A number of items in the profit and loss account have to be treated differently for taxation purposes. Details are: Accounting records Taxation records Exempt income Depreciation buildings Depreciation machinery Legal fees and fines Transfer to provision for warranty expense Transfer to provision for holiday pay 21000 12000 18000 14000 13000...
Net income before taxation is $67,450. A number of items in the profit and loss account have to be treated differently for tax purposes. Accounting Records Taxation Records Interest income earned but not yet received 27,000 NIL Impairment of goodwill 45,000 NIL Transfer to long service leave provision 24,000 NIL Depreciation of machinery 60,000 45,000 Transfer to allowance for doubtful debts 291,000 279,000 An extract from the balance sheet at balance day reveals: Assets Carrying Amount Tax Base Plant and...
At 30 June 2016, Grace Ltd had the following deferred tax balances: Deferred tax liability Deferred tax asset $18 000 15 000 Grace Ltd recorded a profit before tax of $80 000 for the year to 30 June 2017, which included the following items: Depreciation expense – plant Doubtful debts expense Long-service leave expense $7 000 3 000 4 000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2017: Tax depreciation – plant...
Current Attempt in ProgressOn December 31, 2019, Monty Inc. has taxable temporary differences of $2.19 million and a deferred tax liability of $613,200. These temporary differences are due to Monty having claimed CCA in excess of book depreciation in prior years. Monty’s year end is December 31. At the end of December 2020, Monty’s substantively enacted tax rate for 2020 and future years was changed to 30%.For the year ended December 31, 2020, Monty’s accounting loss before tax was $493,500. The following data are also available.1.Pension expense was...
(Deferred Tax Liability, Change in Tax Rate, Prepare Section of Income Statement) Novotna Inc.’s only temporary difference at the beginning and end of 2016 is caused by a $3 million deferred gain for tax purposes for an install- ment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal install- ments in 2017 and 2018. The related deferred tax liability at the beginning of the year is...
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Calculating tax base-assets (7 points) Calculate the tax base at the end of the tax year (30June) for various assets in the following unrelated circumstances. Show your calculations in the worksheet provided at the end of the question. State if the item is a deferred tax asset (DTA) or a deferred tax liability (DTL). a) Accounts receivable has a balance of $41000 There is an allowance for doubtful debts totalling $7000. b)...
On December 31, 2019, Monty Inc. has taxable temporary differences of $2.19 million and a deferred tax liability of $613,200. These temporary differences are due to Monty having claimed CCA in excess of book depreciation in prior years. Monty’s year end is December 31. At the end of December 2020, Monty’s substantively enacted tax rate for 2020 and future years was changed to 30%.For the year ended December 31, 2020, Monty’s accounting loss before tax was $493,500. The following data are also available.1.Pension expense was $88,000 while pension plan...
Requirements: 1. Prepare Journal Entry to record income tax expense, deferred taxes, and income taxes payable for 2018. 2. Draft the income tax expense section of the Income Statement, beginning with "Income before income taxes". 3. Write an analysis directed toward the team at Good Company describing what the numbers mean and how they relate to the business. Information: Good Company began operations in 2018 and has provided the following information: 1. Pretax financial income for 2018 is $200,000 2....
Carla Corporation began 2017 with a $96,900 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $381,400, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $493,500, the tax rate for all years is 40%, and taxable income for 2017 is $354,350. Compute income taxes payable for 2017. Income taxes payable g SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT Prepare...
Tamarisk Corporation began 2017 with a $89,100 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $362,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $572,900, the tax rate for all years is 40%, and taxable income for 2017 is $433,650. (A) Compute income Taxes Payable for 2017. Income Taxes Payable $_________________ Prepare the journal entry to record income tax expense, deferred...