Income tax for the current period is calculated as;

a.

Taxable profit/loss x Deferred tax rate

b.

Temporary difference x Tax rate

c.

Taxable profit/loss x Tax rate

d.

Accounting profit x Tax rate

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Question 3

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Tax base (TB) means

a.

Transactions that would appear in a tax balance sheet

b.

Asset and liability balances that would appear in a balance sheet

c.

Transactions that would appear in a balance sheet

d.

Asset and liability balances that would appear in a tax balance sheet

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Question 4

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The following information relates to Godfrey Limited for the year ended 30 June 2021.

Accounting profit before income tax (after all expenses have been deducted) $300 000

Fines and penalties (not tax deductible) $20,000

Depreciation of plant (accounting) $40,000

Depreciation of plant (tax) $100,000

Long-service leave expense (not a tax deduction until the leave is paid) $8,000

Income tax rate 28%

On the basis of this information the current tax liability is:

a.

$84 400.

b.

$78 000.

c.

$75,040.

d.

$103,040.

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Question 5

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CTT Limited has an asset that cost $300,000 and against which depreciation of $100,000 has accumulated. The accumulated depreciation for tax purposes is $180,000 and the company tax rate is 28%. The tax base of this asset is:

a.

$80,000

b.

$120,000

c.

$220,000

d.

$200,000

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