Find the accounting expense and tax deduction for each year

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Question - At A3M Ltd equipment is depreciated at 25% p.a. straight-line for accounting purposes, but the allowable rate for taxation is 20% p.a. The tax rate is 30%.

Equipment costed $640 000 on 1 July 2013. Assuming that no equipment is purchased or sold during the years ended 30 June 2016.

Required -

a) Find the accounting expense and tax deduction for each year ending 2014 to 2018.

b) Find the impact of depreciation on the calculation of current tax expense for 2017 and 2018.

c) Find the effect on the deferred tax asset account for 2016, 2017 and 2018.

Reference no: EM132570164

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