Question

Question 1

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) Expenses prepaid are $3000. This amount was deemed as a deduction when paid. c) Machinery cost $60000 on July 20X1. It is depreciated for both accounting and taxation purposes by $9000 per year. What is the tax base at 30 June 20X4? d) Loan receivable has a balance of $59000. It is expected to be collected in full. e) Machinery cost $150000 on July 20X4.For accounting purposes, it is depreciated at 25% per annum(no scrap value). Fortaxation purposes, it is depreciated at 337%. What is the tax base at 30 June 20X6? f) Commission income accrued is $1400. Amount is forcommission earned but not received. It will not be included in taxable income until it is received. g) Machinery cost $80000 on 1 July 20X3. For accounting purposes, it is depreciated at 25% per annum (straight-line method). For taxation purposes, it is depreciated at 20% by the straight- g) Machinery cost $80000 on 1 July 20X3. For accounting purposes, it is depreciated at 25% per annum (straight-line method). For taxation purposes, it is depreciated at 20% by the straight- line method. What is the tax base at 30June 20X5 (that is, at end of the second year)? Worksheet format for answers Any Asset Any future future carrying Less plus deductable Equals taxable amount amounts amounts

Question 2

Question 3

3 Questions

Answer 1

Font Alignment Tort able 034 Nume -20000*30% 1 ANSWER 1. Asset Carring amt Future Taxable Profits Future Deductible amounts Tax Base 34000 7000 3000 51000 59000 75000 8666.25 1400 40000 48000 41000 DTA 3000 DTA 51000 59000 66333.75 DTI 1400 DTA 48000 DIX 15 Add 12 ANSWER 2 (a) 13 STATEMENT OF TAXABLE INCOME NP Before Tax Entertainment Doubtful Debt Allowance Long service leave Taxable income 75000 8000 3000 5000 91000 Journal Ibi Sheet1 Ready O Type here to search DOLL

Numbri Long service leave Taxable income 5000 91000 Journal (b) Income tax exp 27300 Dr. P&L 27300 7300 To Income Tax Taxable Deductible Net 3000 DTD 5000 DTd 3000 Temporary Difference Accounts Recievable LSL 5000 Dr. 2400 DTA 2400 Journal To P&L Dr. 6000 6000 DTA For PAYG Installment To P & 38 Sheet1 Ready O Type here to search