Mother Ltd has prepaid insurance with a balance of $38,000 disclosed in the statement of financial position at the end of the reporting period 30 June 2021. The company tax rate is 30%. In relation to prepaid insurance, there will be a:

Select one:

a.

Deferred tax liability of $11,400

b.

Tax base of $38,000

c.

Deductible temporary difference of $38,000

d.

Taxable temporary difference of $11,400

The following information was extracted from the financial records of Drift Ltd: equipment purchased on 1 January 2019 for $300,000 (accounting depreciation 10% straight line; tax depreciation 15% straight line). If the company tax rate is 30%, the deferred tax item that will be recorded by Drift Ltd at 30 June 2021 is:

Select one:

a.

CR Deferred tax liability $11,250

b.

CR Deferred tax liability $4,500

c.

DR Deferred tax asset $11,250

d.

DR Deferred tax asset $4,500

After applying AASB112 Income Taxes, Romeo Ltd recorded the following: Income tax expense (Current) $13,500 (Dr) and Income tax expense (Deferred) $2,200 (Cr).

Romeo Ltd had a profit before tax of $50,000. The company income tax rate is 30%.

The total for income tax expense that should be disclosed on the Statement of Profit or Loss and Other Comprehensive Income is:

Select one:

a.

$15,700 (Dr)

b.

$11,300 (Dr)

c.

$15,000 (Dr)

d.

$3,390 (Dr)

On 30 June 2020 Paul Ltd had the following balances: current tax liability of $13,000; deferred tax asset $19,000 (2019: $11,000); deferred tax liability $10,000 (2019: $8,000); and, profit and loss summary $32,000.

Assuming there are no other changes to the deferred tax accounts throughout the year, and the income tax rate is 30%, the total income tax expense that Paul Ltd will report in the Profit or Loss and Other Comprehensive Income Statement for 30 June 2020 is:

Select one:

a.

$7,000

b.

$19,000

c.

$9,600

d.

$13,000

Derecognition of an item of property, plant and equipment should be recorded when:

Select one:

a.

The asset has decreased in value due to technological changes.

b.

Subsequent expenditure is made on the asset.

c.

The asset has reached a carrying amount equal to half its value.

d.

The asset is sold.