Exam 12: Income Taxes

The following information was extracted from the financial records of Pineapple Limited: Equipment purchased on 1 July 2021 for $200 000 (accounting depreciation 10% straight line; tax depreciation 15% straight line). If the company tax rate is 30%, the deferred tax item that will be recorded by Pineapple Limited at 30 June 2022 is:

Amigos Limited has an asset with a carrying value of $60 000. The tax base of this asset is $40 000. The tax rate is 30%. The deferred tax item to be recognised by Amigos Limited is:

Mangrove Limited has a product warranty liability valued at $12 000. The product warranty costs are not tax deductible until paid out to customers. The company tax rate is 30%. The company has:

Maleny Limited accrued $40 000 for employees' long service leave in the year ended 30 June 2021. This item will not be tax deductible until it is paid in approximately 5 years' time. Assuming the company tax rate is 30%, Maleny Limited must record the following tax effect as a balance date adjustment:

On 1 November 2021, the company rate of income tax was changed from 35% to 30%. At the previous reporting date (30 June 2021) Montgomery Limited had the following tax balances: Deferred tax assets $33 500 Deferred tax liabilities $18 000 What is the impact of the tax rate change on income tax expense?

In general, the differences between the accounting treatment and the income tax treatment of a particular item if that the accounting treatment is based on:

A deductible temporary difference leads to the payment of:

A company commenced business on 1 July 2022. On 30 June 2023, an extract of the statement of financial position prepared for internal purposes, but excluding the effect of income tax, disclosed the following information: Assets Liabilities Cash $20 000 Accounts payable $50 000 Inventories 60 000 Provision for annual leave 8 000 Plant 200 000 Accumulated depreciation (20 000) Additional information: The plant was acquired on 1 July 2022. Depreciation for accounting purposes was 10% (straight-line method), while 20% (straight-line) was used for tax purposes. The tax rate is 30%. Using the following worksheet, determine the deferred tax asset and deferred tax liability. Caryyng amount Future taxable amount Future deductible amount Tax base Taxable temparary differences Deductible temparary differences Assets Cash Irveritories Plart Liabilities Accourits payable Provrn arrual leave Deferred tax liability Deferred tax asset The deferred tax asset is:

A company commenced business on 1 July 2022. On 30 June 2023, an extract of the statement of financial position prepared for internal purposes, but excluding the effect of income tax, disclosed the following information: Assets Liabilities Cash $20 000 Accounts payable $50 000 Inventories 60 000 Provision for annual leave 8 000 Plant 200 000 Accumulated depreciation (20 000) Additional information: The plant was acquired on 1 July 2022. Depreciation for accounting purposes was 10% (straight-line method), while 20% (straight-line) was used for tax purposes. The tax rate is 30%. Using the following worksheet, determine the deferred tax asset and deferred tax liability. Carrying amount Future taxable amount Future deductible amount Tax base Taxable temporary differences Deductible temporary differences Assets Cash Inventories Plant Liabilities Accounts payable Prov'n annual leave Deferred tax liability Deferred tax asset The deferred tax liability is:

In jurisdictions where the impairment of goodwill is not tax deductible, AASB 112 Income Taxes:

AASB 112 Incomes Taxes requires deferred tax assets and liabilities to be measured at the tax rates that:

A taxable temporary difference leads to the payment of:

Colonial Limited has a machine which cost $300 000 and has been depreciated by $100 000 to date. The accumulated depreciation for tax purposes is $180 000 and the company tax rate is 30%. The tax base of this asset is:

Jenson Limited had the following deferred tax balances at reporting date: Deferred tax assets $32 000 Deferred tax liabilities $55 000 Effective from the first day of the next financial period, the company rate of income tax was reduced from 40% to 35%. The adjustment to income tax expense to recognise the impact of the tax rate change is:

Which of the following disclosures are 'optional' under AASB 112?

If a company has not yet paid their existing tax payable they will recognise a in the statement of financial position.

The assumption made for the tax effect method of accounting for a company's income tax is:

The following information relates to Jefferson Limited for the year ended 30 June 2022. Accounting profit before income tax (after all expenses have been included) $200 000 Entertainment expenses (not tax deductible) 10 000 Depreciation of machinery (accounting) 20 000 Depreciation of machinery (tax) 50 000 Annual leave expense (not a tax deduction until the leave is paid) 4 000 Income tax rate 30% On the basis of this information the current tax liability is:

Current tax consequences of business operations are recognised as:

At which time are deferred tax accounting adjustments to be recorded?