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What the temporary difference for equipment is

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Reference no: EM132842272

Problem 1: Coco Ltd has equipment which cost $250,000 and has an accumulated depreciation balance of $100,000. The accumulated depreciation for tax purposes is $80,000 and the company tax rate is 30%. The tax base of this asset is:

a. $51,000

b. $20,000

c. $170,000

d. $80,000

Problem 2: The following information was extracted from the records of Bowen Ltd for the year ended 30 June 2022 in relation to equipment: cost $140,000, carrying amount $40,000 and accumulated depreciation for tax purposes $110,000. The tax rate is 30%. The temporary difference for equipment is:

a. $30,000 taxable temporary difference.

b. $3,000 taxable temporary difference.

c. $10,000 deductible temporary difference.

d. $10,000 taxable temporary difference.

Reference no: EM132842272

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