Question
On 30 June 2018, an extract of the statement of financial position prepared for internal purposes, but excluding the effect of income tax, disclosed the
On 30 June 2018, an extract of the statement of financial position prepared for internal purposes, but excluding the effect of income tax, disclosed the following:
Assets | $ |
Cash | 80,000 |
Inventory | 120,000 |
Accounts receivable | 50,000 |
Allowance for doubtful debts | (8,000) |
Machinery | 250,000 |
Accumulated depreciation | (25,000) |
Goodwill | 10,000 |
Liabilities | |
Accounts payable | 30,000 |
Provision for long-service leave | 9,000 |
Entertainment Payable | 500 |
Additional information:
1. The following balances existed at 1 July 2017:
Deferred tax asset $8,000
Deferred tax liability $5,000
There have been no recorded changes to these balances since 1 July 2017.
2. The machinery was acquired on 1 July 2017. Depreciation for accounting purposes was 10% per annum (straight-line method), while 20% per annum (straight-line method) was used for tax purposes.
3. The tax rate is 30%.
Question 1:
The future deductible amount for the machinery as at 30 June 2018 is:
$25,000 | ||
$225,000 | ||
$200,000 | ||
$250,000 |
Question 2:
The deferred tax liability and deferred tax asset balances at 30 June 2018 are:
'deferred tax liability' $10,000 'deferred tax asset' $6,000 | ||
'deferred tax liability' $7,500 'deferred tax asset' $5,100 | ||
'deferred tax liability' $9,000 'deferred tax asset' $7,200 | ||
'deferred tax liability' $5,000 'deferred tax asset' $8,000 |
Question 3:
The final taxable/deductible temporary differences at 30 June 2018 are:
taxable temporary difference $5,000 deductible temporary difference $8,000 | ||
taxable temporary difference $35,000 deductible temporary difference $17,000 | ||
taxable temporary difference $7,500 deductible temporary difference $5,100 | ||
taxable temporary difference $25,000 deductible temporary difference $17,000 |
Question 4:
The adjustments to deferred tax liability and deferred tax asset at 30 June 2018 are:
deferred tax liability increase $25,000 deferred tax asset increase $17,000 | ||
deferred tax liability decrease $2,500 deferred tax asset increase $2,900 | ||
deferred tax liability increase $3,500 deferred tax asset increase $1,200 | ||
deferred tax liability increase $2,500 deferred tax asset decrease $2,900 |
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