Calculate the tax base of the interest received, Cost Accounting

Assignment Help:

Prepare answers to each of the following questions.  Assume a tax rate of 30%.

(i) Harry Ltd has a balance of prepaid rent in the balance sheet amounting to $100 000 as at 30 June 2012.

(a) Using the appropriate formula, calculate the tax base of the prepaid rent.

(b) Prepare the journal entry (if required) to account for the future tax consequences.

(c) Assuming a temporary difference exists, explain the rationale for recording either a deferred tax asset or deferred tax liability as at 30 June 2012.

(ii) Thomas Ltd has a balance of interest received in advance amounting to $15 000 in the balance sheet as at 30 June 2012.  Interest received is taxed on the cash basis.

(a) Using the appropriate formula, calculate the tax base of the interest received in advance.

(b) Prepare the journal entry (if required) to account for the future tax consequences.

(c) Assuming a temporary difference exists, explain the rationale for recording either a deferred tax asset or deferred tax liability as at 30 June 2012.

(iii) Can 'deferred tax assets' be offset against 'deferred tax liabilities'?  Explain making reference to the appropriate accounting standard.


Related Discussions:- Calculate the tax base of the interest received

Marginal costing and differential costing, MARGINAL COSTING AND DIFFERENTIA...

MARGINAL COSTING AND DIFFERENTIAL COSTING 1.     Differential costing can be used both in case of marginal costing and absorption costing. 2.     In case of marginal costing

Sources of funds, We have noticed that working capital is needed to finance...

We have noticed that working capital is needed to finance that portion of current assets that is not financed through current liabilities. We also noticed that the investments repr

allocation of cost, looking for a dissertation of cost allocatio

looking for a dissertation of cost allocation

Sunk costs, Which statement best describes a sunk cost? A a cost which is i...

Which statement best describes a sunk cost? A a cost which is irrelevant for the future B a cost which must be matched against the revenue C a cost which remains the same at all le

Cost accounting as a service activity, critically explain cost accounting a...

critically explain cost accounting as 1. a service activity 2. a descriptive/analytical discipline 3. an information system

Tax depreciation affect the cash flows statement?, What type of activity co...

What type of activity could a company engage in to improve their cash flows in their Cash Flows Statement? Is this ethical? Could borrowing money make the cash from operations be

Calculate break even point using a mathematical equation, Smart Ltd ha sa u...

Smart Ltd ha sa unit selling price of $500 variable costs per unit of $325 and fixed costs of $140 000. Calculate the break even point in units using (a) a mathematical equations a

.inventory, what are thereasons for holding inventories

what are thereasons for holding inventories

Compute the net cash used (provided) by financing activities, Martinez Corp...

Martinez Corporation engaged in the following cash transactions during 2012. Sale of land and building $186,710 Purchase of treasury stock 42,130 Purchase of land 39,130

Stock control and its level, Stock control and its Level Management m...

Stock control and its Level Management must formulate decisions regarding to the control of stock levels along with a view to minimizing the cost of the company whereas achie

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd