Party Ltd has a taxable loss before tax of ($4500) in 2011. In each year, the tax depreciation exceeds the accounting depreciation by $500. This is expected to reverse within the 10 year tax loss carried forward period. The tax rate is 30%. At the end of 2011 management was unable to confirm if there would be future taxable profits, so this affected how they deferred tax asset recognized. Then in 2012, there was a taxable profit of $7000. What is the amount that would be charged against current tax income in 2012?

a). $150

b). $500

c). $1, 200

d). $1350

Answer rating: 100% (QA)

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