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ACCT6007: Financial Accounting Theory and Practice

   

Added on  2020-05-04

7 Pages495 Words60 Views
Running head: TAXTaxName of the Student:Name of the University:Authors Note:

2TAXTable of ContentsAnswer to Question a).....................................................................................................................3Answer to Question b).....................................................................................................................4Answer to Question c).....................................................................................................................4Answer to Question d).....................................................................................................................4Answer to Question e).....................................................................................................................5Bibliography....................................................................................................................................6

3TAXAnswer to Question a)Calculation of Temporal DifferenceParticularsCarrying ValueTax BaseTemporary differenceDeferred Tax liabilityYear 1Assets$100,000.00$100,000.00Less:Accumulated Depreciation$12,500.00$20,000.00Net Assets$87,500.00$80,000.00$7,500.00$2,250.00Year 2Assets$100,000.00$100,000.00Less:Accumulated Depreciation$25,000.00$40,000.00Net Assets$75,000.00$60,000.00$15,000.00$4,500.00Year 3Assets$100,000.00$100,000.00Less:Accumulated Depreciation$37,500.00$60,000.00Net Assets$62,500.00$40,000.00$22,500.00$6,750.00Calculation of DepreciationParticularsAccounting PurposeTaxation PurposeCost of the Assets$100,000.00$100,000.00Useful life85Depreciation$12,500.00$20,000.00

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