The following assets and liabilities appear in a companys statement of financial position at 31 March 20X6:
Question:
The following assets and liabilities appear in a company’s statement of financial position at 31 March 20X6: LO5 A motor lorry which cost £200,000 is shown at its carrying amount of £40,000. For tax purposes, its written down value is £60,000 A loan payable is shown at £120,000. The repayment of the loan will have no tax consequences A provision of £10,000 for product warranty costs made in the year. For tax purposes, the product warranty costs will not be deductible until the company pays claims An account receivable is shown at £90,000. Of this amount, £50,000 has already been taxed, but the remaining £40,000 will be taxed in the accounting period in which it is received. The whole £90,000 has been included in accounting profit An account payable is shown at £6,000. This relates to an expense which has already been deducted when computing accounting profit, but which will not be deducted for tax purposes until it is paid.
Compute the tax base of each of these assets and liabilities, and identify any taxable or deductible temporary differences.
Step by Step Answer:
Financial Accounting Reporting And Analysis
ISBN: 9780198745310
2nd Edition
Authors: Jennifer Maynard