04-28-2010, 01:06 AM
i have 2 questions abt tax. im kinda in a rush so i really appreciate if sb could help me
1/ this question is about deferred tax asset
On 30 June 2009, the balance of the provision for warranty expenditure in Myer Ltdââ¬â¢s accounts was $130,000. During the year ended 30 June 20010, an additional $210,000 for warranty expenditure, and paid warranty expenditure of $180,000. For income tax purposes, warranty expenditure is deductible when it is paid
with this transaction here is my treatment
first i add 210,000 from profit before tax and deduct 180,000 to get taxable profit. then 2 journal entry is made
dr income tax expense 39,000
cr Deferred tax asset 39,000
reverse of 2009 deferred tax asset (130,000 * .3
Dr deferred tax asset 48,000
Cr income tax expense 48,000
Deferred tax asset 4 2010 (210-(180-130))*.3
I just wanna ask whether my treatment for the above problem is correct
2/ the second question is about permanent different bw taxable income and accounting income
Here is the problem During the year ended 30 June 20010, entertainment costs of $100,000. For income tax purposes, entertainment expenses are not deductible
So i just add 100,000 to profit before tax to convert to taxable income but my lecturer said it's a trick anf it's about permanent different. i hav checked AASB 112 but i cant find anything about permanent different. so i really wanna ask about the journal entry as well as some info about permanent diffent.
Many thanks in advance
1/ this question is about deferred tax asset
On 30 June 2009, the balance of the provision for warranty expenditure in Myer Ltdââ¬â¢s accounts was $130,000. During the year ended 30 June 20010, an additional $210,000 for warranty expenditure, and paid warranty expenditure of $180,000. For income tax purposes, warranty expenditure is deductible when it is paid
with this transaction here is my treatment
first i add 210,000 from profit before tax and deduct 180,000 to get taxable profit. then 2 journal entry is made
dr income tax expense 39,000
cr Deferred tax asset 39,000
reverse of 2009 deferred tax asset (130,000 * .3
Dr deferred tax asset 48,000
Cr income tax expense 48,000
Deferred tax asset 4 2010 (210-(180-130))*.3
I just wanna ask whether my treatment for the above problem is correct
2/ the second question is about permanent different bw taxable income and accounting income
Here is the problem During the year ended 30 June 20010, entertainment costs of $100,000. For income tax purposes, entertainment expenses are not deductible
So i just add 100,000 to profit before tax to convert to taxable income but my lecturer said it's a trick anf it's about permanent different. i hav checked AASB 112 but i cant find anything about permanent different. so i really wanna ask about the journal entry as well as some info about permanent diffent.
Many thanks in advance
