Deferred tax assets, Taxation

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:- Deferred tax assets

Determine the tax liability amount, Billsby Corporation had a tax liability...

Billsby Corporation had a tax liability for 20X7 of $20,000 based on a tax rate of 40%, but the accounting staff needs your help in determining the tax expense and deferred tax amo

Inherentance., Where do I file a person''s life insurance and what they hav...

Where do I file a person''s life insurance and what they have inherited.

Cumulative software problem, albert''s granfather died and left a portafolo...

albert''s granfather died and left a portafolo of municipal bonds. in 2016, the pay ivan $80.000 in tax-free interest. since the bonds

Compute the cost of external equity, Suppose a company issues common stock ...

Suppose a company issues common stock to the public for $25 a share. The expected dividend is $2.50 per share and the growth in dividends is 8%. If the flotation cost is 10% of the

Taxable Income, John and Ellen Brite are married and file a joint return. J...

John and Ellen Brite are married and file a joint return. John owns an unincorporated specialty electrical lightning retail store, Brite-On had the following assets on January 1, 2

Tds, Dawn's new car has a FMV of $20,000 and it weighs 3,000 pounds. The co...

Dawn's new car has a FMV of $20,000 and it weighs 3,000 pounds. The county also assessed a property tax on the car. The tax was 2% of its FMV and $10 per hundred weight. The car is

Investment value and rate, The second task of the program is to calculate...

The second task of the program is to calculate/display a possible investment. First, the program should ask the amount of money that he/she requires (on an average) per week a

Compute the service and interest cost for 2012, Sachs Brands' defined benef...

Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.2% × current service years × final year's salary, payable at the end of each year. Angel

#62, Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Sp...

Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husb

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