Corporate Accounting Study Material

Corporate Accounting
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Contents
QUESTION 1..................................................................................................................................3
a) Determining the taxable income and income tax payable.......................................................3
b) Determining increase or decrease of deferred liability and deferred tax asset........................3
c) Journal entries for income tax.................................................................................................4
d) Balances of the deferred tax liability and deferred tax asset...................................................4
QUESTION 2..................................................................................................................................4
Journal entries of Quick Buck Ltd at 1 July 2019.......................................................................4
QUESTION 3..................................................................................................................................5
a) Liala Ltd..................................................................................................................................5
b) Journal entries in 30 June 2017 to eliminate the intra group transfers of equipment..............6
QUESTION 4..................................................................................................................................6
a) Calculating the non-controlling interest as at 30 June 2019....................................................6
b) Journal entries..........................................................................................................................7
QUESTION 5..................................................................................................................................8
a) Table for controlling and non controlling interest...................................................................8
b) Percentage of the voting in Son 7 Ltd that will be controlled by the Daddy Ltd....................9
c) Percentage of the dividend declared by Son 7 Ltd that will be received by the Daddy Ltd....9
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QUESTION 1
a) Determining the taxable income and income tax payable
All amount in $
Particulars Amount ($)
Net profit before tax 80000
Add: Depreciation Expense on plant 7000
Add: Doubtful debt expense 3000
Add: Long service leave expense 4000
Less: Tax depreciation on plant (8000)
Less: Bas debts written off (2000)
Taxable income 84000
Income tax payable (Tax rate 30% * 84000) 25200
b) Determining increase or decrease of deferred liability and deferred tax asset
Increase or decrease in deferred liability due to depreciation
Particulars Amount ($)
Tax depreciation on plant 8000
Depreciation Expense on plant 7000
Increase in deferred liability [(8000 – 7000)*30%] 300
Increase or decrease in deferred liability due to doubtful debts
Particulars Amount ($)
Doubtful debt expense 3000
Bad debts written off 2000
Increase in deferred liability [(3000 – 2000)*30%] 300
Increase or decrease in deferred liability due to long service leave
Particulars Amount ($)
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