At 30 June 2023, Burroo Ltd recognised a deferred tax asset of ($30) 000 and a deferred
Question:
At 30 June 2023, Burroo Ltd recognised a deferred tax asset of \($30\) 000 and a deferred tax liability of \($45\) 000 by applying an income tax rate of 30%. The government announced that it will increase the tax rate as of 1 July 2023 to 35%. In its deferred tax worksheet for the year ending 30 June 2024, Burroo Ltd calculated that its taxable temporary differences were \($120\) 000 and its deductible temporary differences were \($160\) 000.
Required
Prepare a report for the chief accountant on how the increase in the income tax rate will affect the application of tax-effect accounting for the year ended 30 June 2024.
Step by Step Answer:
Financial Reporting
ISBN: 9780730396413
4th Edition
Authors: Janice Loftus, Ken Leo, Sorin Daniliuc, Belinda Luke, Hong Nee Ang, Mike Bradbury, Dean Hanlon, Noel Boys, Karyn Byrnes