Brunch Ltd has a building which cost $475,000 and has an accumulated depreciation balance of $83,125. The accumulated depreciation for tax purposes is $66,500 and the company tax rate is 30%. The tax base of this asset is:

Select one:

a.

$122,550

b.

$66,500

c.

$391,875

d.

$408,500

A company commenced business on 1 July 2022. On 30 June 2023, a draft statement of financial position disclosed the following information: accounts receivable $25,000, allowance for doubtful debts $3,000, plant $200,000, accumulated depreciation plant $20,000, provision for annual leave $8,000, and revenue in advance $12,000.

The plant was acquired on 1 July 2022. Depreciation for accounting purposes was 10% (straight-line method), while 20% (straight-line) was used for tax purposes. The company tax rate is 30%.

In a deferred tax worksheet, the ending balances for the deferred tax accounts are:

Select one:

a.

Deferred Tax Liability $20,000; Deferred Tax Asset $23,000

b.

Deferred Tax Liability $6,000; Deferred Tax Asset $6,900

c.

Deferred Tax Liability $6,900; Deferred Tax Asset $6,000

d.

Deferred Tax Liability $23,000; Deferred Tax Asset $20,000

Always Ltd has an asset with a carrying amount of $75,000. The tax base of this asset is $60,000. The company tax rate is 30%. The deferred tax item to be recognised by Always Ltd is:

Select one:

a.

Deferred tax asset of $15,000

b.

Deferred tax asset of $4,500

c.

Deferred tax liability of $4,500

d.

Deferred tax liability of $15,000

The following information was available on 30 June 2020:

• 30 June 2020 total taxable temporary differences $84,000 and total deductible temporary differences $35,000
• 1 July 2019 deferred tax asset $17,200
• 1 July 2019 deferred tax liability $21,600
• Income tax rate 30%

The journal entry to adjust the deferred tax accounts for 30 June 2020 is:

Select one:

a.

DR Income Tax Expense (deferred) $10,300, CR Deferred Tax Liability $3,600, CR Deferred Tax Asset $6,700

b.

DR Deferred Tax Asset $6,700, CR Deferred Tax Liability $3,600, CR Income Tax Expense (deferred) $3,100

c.

DR Deferred Tax Asset $8,000, DR Deferred Tax Liability $11,100 CR Income Tax Expense (deferred) $19,100

d.

DR Deferred Tax Asset $17,800, DR Income Tax Expense (deferred) $44,600, CR Deferred Tax Liability $62,400

Melt Ltd had a $20,000 balance for Provision for Warranty for the year ended 30 June 2021. If the company tax rate is 30%, the deferred tax item that will be recorded by Melt Ltd at 30 June 2021 is:

Select one:

a.

CR Deferred tax liability $6,000

b.

DR Deferred tax liability $6,000

c.

CR Deferred tax asset $6,000

d.

DR Deferred tax asset $6,000