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
Revenue: Revenue is how much a company receives in income when making sales. Revenue increased from 2011 to 2012 by 14.5%. This is great considering poor economic conditions. Gr


Question 1: (a) Why does Government intervene in the market's allocation of resources even if the economy is Pareto efficient? (b) What are the principal reasons why marke

I need help determining the character of the recognized gain or allowable loss in each of the cases listed below. In each case, these are all of the tax payer realized gains or los

How to raise an invoice with WCT for Civil construction job in Andar pradesh

I still don''t know this yet but my teacher wants me to do this a i don''t know this topic?

Kyle worked as a free-lance software engineer for the first three months of 2013. During that time, he earned $78,000 of self-employment income. On April 1, 2013, Kyle took a job a

Hi can you help me with my tax research and answer the following After reading the Treasury Department Circular 230 and AICPA statement of standard for tax services, answer the fo

Which of the following entities may not use the cash method of accounting? A partnership with average annual gross receipts in excess of $5 million. A C corporation whose avera

Caroline is a 55-year-old Australian resident. She  is the chief marketing officer based in Sydney for XYZ Limited (XYZ), a public company listed on the Australian Securities Excha