At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000 Doubtful debts expense 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020
At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000 Doubtful debts expense 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 11P
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At 30 June 2019, Beta Ltd had the following
Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the
following items:
Doubtful debts expense 3,000
Long-service leave expense 4,000
For
Tax depreciation – plant $8,000
Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate
of 30% applies.
Required:
d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020
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