Consider each of the following assets and liabilities which appear in an entitys balance sheet at 30
Question:
Consider each of the following assets and liabilities which appear in an entity’s balance sheet at 30 April 2010:
Compute the tax base of each of these assets and liabilities and identify any taxable or deductible temporary differences.
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(a) A motor lorry which cost EUR 200,000 is shown at its written-down value of EUR 40,000. For tax purposes, its written-down value is EUR 60,000. (b) A loan payable is shown at EUR 120,000. The repayment of the loan will have no tax consequences. (c) An amount receivable is shown at EUR 90,000. Of this amount, EUR 50,000 has already been taxed but the remaining EUR 40,000 will be taxed in the accounting period in which it is received. The entire amount of EUR 90,000 has already been included in the accounting profit. (d) A payable is shown at EUR 6,000. This relates to an expense which has already been deducted when computing accounting profit but which will not be deducted for tax purposes until it is paid.
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Related Book For
Advanced Financial Accounting An International Approach
ISBN: 9780273712749
1st Edition
Authors: Jagdish Kothari, Elisabetta Barone
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