Exam 17: Accounting for Company Income Tax

Differences between the carrying amounts of an entity's net assets determined under accounting standards and accrual accounting, and the tax bases of those net assets determined under the Income Tax Assessment Act, are described as:

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

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

CTV Limited has an asset which cost $400 and against which depreciation of $200 has accumulated. The accumulated depreciation for tax purposes is $280 and the company tax rate is 30%. The tax base of this asset is:

Unless a company has a legal right of set-off, AASB 112 Income Taxes, requires disclosure of which of the following information for deferred tax statement of financial position items? I. The amount of deferred tax assets recognised. II) The amount of the deferred tax liabilities recognised. III) The net amount of the deferred tax assets and liabilities recognised. IV) The amount of the deferred tax asset relating to tax losses.

Sydney Limited accrued $20 000 for employees' long service leave in the year ended 30 June 2015. This item will not be tax deductible until it is paid in approximately 10 years' time. If the company tax rate is 30%, Sydney Limited must record which of the following tax effects as a balance date adjustment?

Generally, when considering the differences between the accounting treatment and the income tax treatment of a particular item the accounting treatment is based on:

The entries for income tax for the period are comprised of three components. Which of the following is NOT included in the components?

Under AASB 112 Incomes Taxes, deferred tax assets and liabilities are measured at the tax rates that:

The tax expense related to profit or loss of the period is required to be presented:

Deferred tax accounting adjustments are recorded at what point in time?

The recognition of __________ provides more complete or relevant information for economic decision making than __________.

The following information was extracted from the financial records of Panda Limited: equipment purchased on 1 July 2014 for $140 000 (accounting depreciation 10% straight line; tax depreciation 20% straight line). If the company tax rate is 30%, the deferred tax item that will be recorded by Panda Limited at 30 June 2015 is which of the following?

On 1 April 2015, the company rate of income tax changed from 35% to 30%. At the previous reporting date (30 June 2014) Monty Limited had the following tax balances: -deferred tax assets $20 250 -deferred tax liabilities $15 000. What is the impact of the tax rate change on income tax expense?

The following information relates to Hoover Limited for the year ended 30 June 2015. Accounting profit before income tax (after all expenses have been included) $280 000 Fines and penalties (not tax deductible) 22 000 Depreciation of plant (accounting) 50 000 Depreciation of plant (tax) 110 000 Long-service leave expense (not a tax deduction until the leave is paid) 10 000 Income tax rate 30% No employee has been paid long-service leave in the current year. On the basis of this information the current tax liability is:

A taxable temporary difference is expected to lead to the payment of:

Jackson Limited had the following deferred tax balances at reporting date: -deferred tax assets $10 000 -deferred tax liabilities $26 000. Effective from the first day of the next financial period, the company rate of income tax was reduced from 40% to 30%. The adjustment to income tax expense to recognise the impact of the tax rate change is:

During the year ended 30 June 2015 Harry Ltd, pays quarterly PAYG tax instalments as follows: $6000 on 28 July 2014 $2000 on 28 October 2014 $8000 on 28 February 2015 $10 000 on 28 April 2015. On 30 June 2015, Harry Ltd determines its total current tax liability for the year to be $28 000. The final tax instalment for the year will be a:

Tax losses can be viewed as providing:

A deductible temporary difference is expected to lead to the payment of: