Using WORKSHEET that is provided, indicate for each of the statementswhether it is True (T) or False (F) according to NZ IAS 12.If the statement is false, rewrite the statement to make it true.If the statement is true, you do not need to explain.WorksheetItemT/F(a) Information: A company has recorded $1m goodwill on the balance sheet.For tax purposes, goodwill impairment is never allowed as a deductibleexpense.Statement: Therefore, the tax base of the goodwill is $1m.Rewrite Statement:

When a company buys another company for more than the fair market worth of its assets, goodwill is…

Using WORKSHEET that is provided, indicate for each of the statements whether it is True (T) or False (F) according to NZ IAS 12. • If the statement is false, rewrite the statement to make it true. If the statement is true, you do not need to explain. Worksheet Item (a) Information: A company has recorded $1m goodwill on the balance sheet. For tax purposes, goodwill impairment is never allowed as a deductible expense. Statement: Therefore, the tax base of the goodwill is $1m. Rewrite Statement: T/F

Using WORKSHEET that is provided, indicate for each of the statements whether it is True (T) or False (F) according to NZ IAS 12. • If the statement is false, rewrite the statement to make it true. If the statement is true, you do not need to explain. Worksheet Item (a) Information: A company has recorded $1m goodwill on the balance sheet. For tax purposes, goodwill impairment is never allowed as a deductible expense. Statement: Therefore, the tax base of the goodwill is $1m. Rewrite Statement: T/F

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 7P

See similar textbooks

Similar questions

When accounting standards require an asset to be expensed immediately but tax rulesrequire the item to be capitalized and amortized, the company will most likely record:A . a deferred tax asset.B . a deferred tax liability.C . no deferred tax asset or liability.
A company has only one deductible temporary difference due to the use of the current expected credit loss method (CECL) of recognizing credit losses (ie, bad debts) for financial reporting purposes. The company is trying to determine how the resulting deferred tax asset will be reported on the balance sheet. Which section of the authoritative literature describes whether deferred tax assets and liabilities are classified as current or noncurrent? Enter your response in the answer fields below. Unless specifically requested, your response should not cite implementation guidance. Guidance on correctly structuring your response appears above and below the answer fields. Type the topic here. Correctly formatted FASB ASC topics are 3 digits. FASB ASC
ABC Corp calculated that it had sustained a deferred tax asset of $450,000 in respect of a tax loss and deductible temporary difference of $2.25 million but it had not recognized any such asset in the balance sheet. During the year, a business was injected to the company by the major shareholder and the company began to derive taxable profit to offset with the loss brought forward. Required: Discuss the implication of the current development on ABC’s deferred tax asset. Suggest journal entries to effect the implication in (1). If the tax rate is increased to 30%, discuss and suggest journal entries.
ou are working with an accounting firm. Sussie, who is representing Suss Co, needs advice about depreciating assets. She asks; what are depreciating assets? What are the different ways to calculate the declining value of depreciating assets? Furthermore, Suss Co has aggregated turnover of $ 2 billion. In December 2021, Suss Co purchased a machine for $4m, which was commenced immediately for an income-producing purpose. What tax does the Suss Co claim?
The following information has been taken from a taxable entity in Oman for the tax year 2019-2020 1. ABC Company had a plan to sell their Land on 1st December 2019. But the company postponed their sale plan to 1st December 2021. 2. A taxable entity in Oman purchase heavy equipment was OMR120,000 on 10th November 2019. It was investigated by the external auditor on 31st December 2019 that the business showed their invoice amount purposefully on profit and loss account was OMR210,000. 3. Moving funds into mutual funds equity on 1st March 2019, so that dividend can be earned tax free for the tax year 2019. 4. Altering a General expense bill of OMR700 to read OMR7000 on 10th April 2020 so that a larger tax deduction is claimed on tax return for the tax year 2020. 5. The company had a plan to sell the securities which are listed in MSM on 12th October 2020. But due to loss predicted on sale of securities for the tax year 2020, the company had postponed their…
1.Whatare the conditions under Income Tax Act, ACT 896 forexpenditure to be allowed as a deduction when computingbusiness, employment or investment income?2.List5 allowable deductions from the assessable income3.Assumethat the written down value of assets in the pool 2 isGH 100 000 and the repairs and improvements is GH 20 000What will be the tax allowable expenses?4.Giventhat the assessable income for the company isGH 140 000 the finance cost is GH 90 000 and there is nocorresponding finance gain, what is the allowable expense?
A company receives advance payments from customers that are immediately taxable butwill not be recognized for accounting purposes until the company fulfi lls its obligation.Th e company will most likely record:A . a deferred tax asset.B . a deferred tax liability.C . no deferred tax asset or liability.
Which of the following statements is false? A. A corporation must file a Federal income tax return even if it has no taxable income for the year. B. Dividend received deduction is calculated as the dividend received times deduction percentage. C. A corporation cannot deduct net capital losses against its operating income. D. A C corporation with taxable income of $100,000 in the current year will have a tax liability of $21,000. E. Schedule M-1 is used to reconcile net income as computed for financial accounting purposes with taxable income reported on the corporation's income tax return.
Windy Ltd has requested that you prepare the tax-effect accounting information for the year ended 30 June 2021. The following has been extracted from their internal reports: -Accounting profit before tax for the year................................................... $855,000 -Expenses brought to account included: Depreciation – plant................................................................................... $93,000 Impairment loss on goodwill....................................................................... $13,500 Long service leave...................................................................................... $13,000 - Accumulated depreciation on plant for tax purposes was $130,000 on 30 June 2020 and $270,000 on 30 June 2021. There were no additions or disposals of plant during the year. - Bad debts of $14,700 were written off during the year against the Allowance for Doubtful Debts. - On 1 January 2021 the company income tax rate was increased from 30% to…
Thamaga (Pvt) Ltd settled some of the above expenses in full including settling the necessary withholding tax obligations. However the following expenses were still outstanding as at 30 June 2022. Technical Advice fees P8,060 Management consultancy fees P13,780 Insurance fees P3,200 Advertising in South African Magazine P5,500 Importation of goods P250,000 Thamaga (Pty) Ltd’s taxable income for the year ended 30 June 2022 amounted to P840,000 before adjustments relating to the above outstanding amounts. Required: Calculate the company’s taxable income for the year after considering some adjustments which might be required due to the…
For the year ended 30 June, BBNT Pty Ltd, a lawn mower manufacturer, reported an operating (accounting) profit of $750,000. The company does not elect to be taxed as a SBE taxpayer. In coming to this profit figure, the financial accountant had taken into account the following items. Please explain the income tax implications for each of the items. You are NOT required to compute the amount of capital allowance. $30,000 has been claimed as a deduction being the amortisation of goodwill arising from the acquisition of a business two years earlier. A provision has been raised for future warranties equal to 2% of sales. During the year, the sales amounted to $5 million. Depreciation on the buildings was $50,000. However, for tax purposes, only $25,000 is tax deductible. The company spent $75,000 on legal expenses opposing an application by Heavy Mowers Pty Ltd to extend its patent on a brand of mower. If the patent was not extended, then BBNT could produce a similar mower. The company…
Deferred Tax Assets. Components of the deferred tax asset of Biosante Pharmaceuticals, Inc., are shown in Exhibit 2.14. The company had no deferred tax liabilities. REQUIRED a. At the end of 2008, the largest deferred tax asset is for net operating loss carryforwards. (Net operating loss carryforwards [also referred to as tax loss carryforwards] are amounts reported as taxable losses on tax filings. Because the tax authorities generally do not pay corporations for incurring losses, companies are allowed to carry forward taxable losses to future years to offset taxable income. These future tax benefits give rise to deferred tax assets.) As of the end of 2008, what is the dollar amount of the companys net operating loss carryforwards? What is the dollar amount of the deferred tax asset for the net operating loss carryforwards? Describe how these two amounts are related. b. Biosante has gross deferred tax assets of 28,946,363. However, the net deferred tax assets balance is zero. Explain. c. The valuation allowance for the deferred tax asset increased from 21,818,084 to 28,946,363 between 2007 and 2008. How did this change affect the company's net income?