Question
KB Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected to have a useful life of 4 years (straight-line basis)
KB Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected to have a useful life of 4 years (straight-line basis) and no residual value. The ATO allows the company to depreciate the asset over 5 years for taxation purposes. The profit before tax for the company for the year ending 30 June 2015 is $500,000. The tax rate is 30%.
Required:
a) Calculate the company's taxable profit and hence its tax payable for 2015.
b) Determine the deferred tax liability or deferred tax assest that will result
c) Prepare necessary journal entries on 30 June 2015.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started