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Prosperity Biscuits Ltd buys equipment at the start of 20X1 for $60,000 and depreciates it on a straight-line basis over its expected useful life
Prosperity Biscuits Ltd buys equipment at the start of 20X1 for $60,000 and depreciates it on a straight-line basis over its expected useful life of five years. For tax purposes, the equipment is written off over three years. The tax rate is 17%. Required Assuming Nil profits/losses after depreciation in years 20X1 to 20X5 show the current and deferred tax impact in years 20X1 to 20X5 of the acquisition of the equipment.
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