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

Income tax and investment calculator, Income Tax and Investment Calculator ...

Income Tax and Investment Calculator Your task is to produce a Java program, which can calculate income tax and investment growth based on the yearly income/salary of an indiv

Disregard the alternative minimum tax, Dan and Cheryl are married, file a j...

Dan and Cheryl are married, file a joint return, and have no children. Dan is a pharmaceutical salesman and Cheryl is a nurse at a local hospital. Dan%u2019s SSN is 400-20-1000 and

Share returns, The tab-delimited text file C223C323_A1_S1_2013_Q1_Q2.txt co...

The tab-delimited text file C223C323_A1_S1_2013_Q1_Q2.txt contains data on the share price of FirstGroup plc (FirstGroup), the public transport company, the share price of Cairn En

Advanced tax, The Madison Restaurant was formed a S corporation at the end ...

The Madison Restaurant was formed a S corporation at the end of last year. Bob Buron, owns 60% of the stock, manages the restaurant. Ray Huges owns the remaining 40%

Investment account output, Suppose a resident with yearly income of $40,000...

Suppose a resident with yearly income of $40,000.00. The Medicare Levy will be $600.00 and the taxes will be $5,550.00/year or $106.73/week. His/her net salary per year will be $33

Tax questions, 1.   Don and Harvey began operations as a partnership on Oct...

1.   Don and Harvey began operations as a partnership on October 3, 2010. The company spent $60,500 on organization costs that year. How much can the company deduct in 2010 relatin

Recognition of deferred tax liabilities, What is the amount of tax expense?...

What is the amount of tax expense? Describe the controversy with respect to the recognition of deferred tax liabilities?

What are the short-term and long-term market, a. What are the short-term an...

a. What are the short-term and long-term market reactions after an IPO? What are the potential reasons for these returns? b. How do you explain the lack of IPO activity in the U

Tax haven, T ax Haven A country with tax-preference laws for fo...

T ax Haven A country with tax-preference laws for foreign organization and individuals. 3 classes of jurisdictions are provided to as tax havens those are (1) levy taxe

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