For the year ending 30/06/2016 Aladdin Ltd. has made an accounting profit before tax in amount of $410,000. The following relevant transactions occurred:
The balance of Accounts Receivable at year-end was $300,000 less an associated allowance for doubtful debts in amount of $60,000. During the year, $40,000 worth of bad debts have been written off, while the Bad debt expense for the year was $80,000. For tax purposes, bad debts are recognised when written off.
The company purchased a piece of equipment on 1/7/2014 for $200,000 with a useful life of four years, depreciated on straight-line basis. For tax purposes, the equipment is depreciated over two years.
The company has service revenue received in advance in amount of $200,000 for services expected to be provided in 2017. Assume revenue is taxable when cash is received.
 The following information are also provided:
o Company tax rate = 30%
o Opening balance of DTA = $6,000
o Opening balance of DTL = $10,000

Given all these information, please calculate the taxable income, DTA, and DTL.

Answer rating: 100% (QA)

To calculate the taxable income deferred tax assets DTA and deferred tax liabilities DTL we need to consider the differences between accounting profit ... View the full answer