Deferred tax assets, Taxation

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.

Posted Date: 4/1/2013 1:37:20 AM | Location : United States







Related Discussions:- Deferred tax assets, Assignment Help, Ask Question on Deferred tax assets, Get Answer, Expert's Help, Deferred tax assets Discussions

Write discussion on Deferred tax assets
Your posts are moderated
Related Questions

You have been offered a unique investment opportunity today; you will receive $500 one year from now. If you invest $10,000 today, you will receive $500 one year from now, $1500 tw

What is the amount of tax expense? Describe the controversy with respect to the recognition of deferred tax liabilities?

Miguel receives tangible personal property as an inheritance in 2011. The property was depreciated by the deceased (Miguel's father), and Miguel will also depreciate it. At the dat

Microrax Company earned before-tax income of $960,000 for its 2013 fiscal year. During the year the company experienced a $605,000 loss from earthquake damage that it considered to

should be on 2012 forms and done in pencil. It should include a schedule that shows the fiduciary income calculation and other relevant calculations. Jack Green established the Jac

Mann Limited purchased machinery  on 1 January 20.9, on which date it was estimated to have a useful life of 5 years and a nil residual value. The carrying amount on 31 December 20

Temporary difference; future deductible amounts; taxable income given Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satis

King Corporation, an accrual method taxpayer, reports the following results for 2014: Regular taxable income before regular tax NOL deduction $800,000 Minus: Regular tax NOL deduc

An expatriation tax is a tax on somebody who gives up their citizenship. In United States, the expatriation tax provisions under Section 877 and Section 877A of the Internal Revenu