Solution-Calculate the deferred tax asset and deferred tax

Calculate the deferred tax asset and deferred tax liability

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Reference no: EM132618156

Question - In its balance sheets at June 30, the following balances were reported by Franklin Ltd (amounts in thousands):

	2018	2019
Allowance for doubtful debts	$400	$300
Provision for warranty	$200	$400
Allowance for impairment - goodwill	--	$200
Accumulated depreciation - plant	$2,000	$2,500

Goodwill impairment expense is not a tax deduction. For income tax purposes, the accumulated depreciation at June 30, 2019 was $3,000,000 (June 30, 2018 $2,600,000). For the year ended June 30, 2019 the company earned an accounting profit before tax of $4,000,000. The income tax rate is 30%.

Required - At June 30, 2019 calculate the deferred tax asset and deferred tax liability?

a. $210,000 and $150,000

b. $180,000 and $180,000

c. $180,000 and $210,000

d. $180,000 and $270,000

e. None of the answers.

Reference no: EM132618156

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Calculate the deferred tax asset and deferred tax liability

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Reference no: EM132618156

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