Solution-Compute and enter the amount deferred tax liability

Compute and enter the amount deferred tax liability

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Reference no: EM133173017

Question - On 1 July 2015 Sarah Ltd acquires all the shares in Jane Ltd for $785,000 cash

The financial statements of Jane Ltd as at 1 July 2015 shows the following:

Retained earnings 185,000

Share capital 196,000

The tax rate is 30%

At the date of acquisition all the net assets of Jane Ltd are at fair value except for the following:

	Carrying amount	Fair value
Land	$116,000	$179,000
Equipment (cost $290,000)	$146,000	$196,000

The land was sold on 1 April 2018 for $240,000 and the equipment has a further 15 years of useful life from the date of acquisition.

Required -

1. Compute and enter the amount Deferred Tax Liability (DTL) that forms part of the tax adjustment entry on the equipment in the answer block.

2. Provide all worksheet adjustment entries at date of consolidation on 30 June 2020 in next part of this question.

Reference no: EM133173017

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Compute and enter the amount deferred tax liability

Reference no: EM133173017

Reference no: EM133173017

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