Question
Needed At A3M Ltd equipment is depreciated at 25% p.a. straight-line for accounting purposes, but the allowable rate for taxation is 20% p.a. The tax
Needed
At A3M Ltd equipment is depreciated at 25% p.a. straight-line for accounting purposes, but the allowable rate for taxation is 20% p.a. The tax rate is 30%.
Equipment costed $640 000 on 1 July 2013. Assuming that no equipment is purchased or sold during the years ended 30 June 2016.
Required
a) the accounting expense and tax deduction for each year ending 2014 to 2018. (5 marks)
b) the impact of depreciation on the calculation of current tax expense for 2017 and 2018. (4 marks)
c) the effect on the deferred tax asset account for 2016, 2017 and 2018. (11 marks)
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