Bowe Ltd is a reporting entity and complies with AASB 112 ‘Income Taxes'. Bowe maintains separate accounts for any deferred tax assets or deferred tax liabilities (i.e. does not offset deferred tax assets and deferred tax liabilities). Bowe’s accounting records for the year ended 30 June 2020 disclose the following:

Revenue	$1,200,000
Cost of goods sold	300,000
SG&A expenses	100,000
Capital expenditure (not allowed for tax deduction)	200,000
Deductible temporary difference, 30 June 2020	50,000
Taxable temporary difference, 30 June 2020	80,000
Deductible temporary difference, 30 June 2019	50,000
Taxable temporary difference, 30 June 2019	30,000
Tax rate	20%
Total tax base of assets	1,000,000
Total tax base of liabilities	800,000

REQUIRED:

Calculate deferred tax expense for the year ended 30 June 2020. Your answers must comply with AASB 112 ‘Income Taxes’. Show all necessary working, explanations and assumptions to support your answer.

Answer rating: 100% (QA)

answers Temporary Diffrences are diffrence between Carrying amount an asset or Liablity in the balan... View the full answer