Question: ***Please explain why each one is correct Question 15 Rolls Royce buys a piece of equipment for 30,000, which is depreciated over 10 years in

***Please explain why each one is correct Question 15 Rolls Royce buys***Please explain why each one is correct

Question 15 Rolls Royce buys a piece of equipment for 30,000, which is depreciated over 10 years in accordance with accounting standards, but is depreciated over 6 years for tax purposes. Assume their tax rate is 25%. Which of the following are true (choose all that are true)? Complete 0.00 points out of 1.00 a the depreciation amount used in calculating their taxable income will be less than that used in calculating their profit before tax using accounting standards Remove flag b. they will record a deferred tax liability of 500 in each of the first six years for a total deferred tax liability of 3000 at the end of six years c. in the last four years they will end up paying off any deferred tax liability accumulated in the first six years d. after 10 years they will have depreciated more of the asset away under accounting standards they they did for tax purposes e. the tax base and carrying amount associated with the asset will be equal to each other over the first 6 years of the life of the asset Your answer is partially correct. You have selected too many options

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!