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What would be the balance of the deferred tax liability

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Question: Assume that for possoes ltd the only temporary difference for tax-effects accounting purposes relates to the depreciation of a newly acquired machine. The machine is acquired on 1 july 2015 at a cost of $255,000. Its useful life is considered to be ten years, after which it is expected to have no residual value. For tax purposes it can be fully written off over five years. The tax rate is assumed to be 30 per cent.

1. Determine whether the depreciation of the machine will lead to a deferred tax asset, or a deffered tax liability. Please explain.

2. What would be the balance of the deferred tax liability as at 30 june 2021?

Reference no: EM132722873

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