acctsols - 3 Jan Topic 5 Accounting for income tax...

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1 3 Jan Topic 5 Accounting for income tax • Reconcile profit before tax to taxable income in order to recognise current tax • Distinguish between the carrying amounts and tax bases of assets and liabilities in order to determine assessable temporary differences and deductible temporary differences • Recognise deferred taxes assets and deferred tax liabilities and explain how they reverse Practice Questions: Picker et al, Chapter 8 Problem 8.1 Past Exam Paper questions Problem 8.1 Current and deferred tax Kilcoy Ltd Current Tax Worksheet (for year ended 30 June 2010) $ $ Accounting profit 256 700 Add: Entertainment expense (non deductible) 1 700 Depreciation – buildings (non deductible) 7 600 Depreciation – plant 22 500 Insurance expense 4 200 Development expenditure 15 000 Doubtful debts expense 4 100 Annual leave expense 46 000 101 100 Deduct: 357 800 Royalty revenue (tax exempt) 8 000 Bad debts written off 3 500 Annual leave paid 52 000 Insurance paid 3 700 Depreciation – plant (tax) 30 000 Gain – Sale of buildings (non assessable)
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acctsols - 3 Jan Topic 5 Accounting for income tax...

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