In 20X8 Darton Co had taxable profits of $120,000.

In the previous year (20X7) income tax on 20X

profits had been estimated as $30,000. The corporate income tax rate is 30%.
Required
Calculate tax payable and the charge for 20X8 if the tax due on 20X7 profits was subsequently agr
the tax authorities as:
(a) $35,000; or
(b) $25,000.
Any under or over payments are not settled until the following year's tax payment is due.

a 36,000
over provision 5000
41,000

B 36,000
Under provision -5000
31,000
Tax rate 9300
0X7) income tax on 20X7

s was subsequently agreed with

yment is due.
Jonquil Co buys equipment for $50,000 on 1 January 20X1 and depreciates it on a straight-line ba
its expected useful life of five years. It has no other non-current assets.
For tax purposes, the equipment is depreciated at 25% per annum on a straight-line basis.
Accounting profit before tax for the years 20X1 to 20X5 is $20,000 per annum.
The tax rate is 40%.
Required:
Show the calculations of current and deferred tax for the years 20X1 to 20X5

Acc base
20X1 20X2 20X3 20X4 20X5
Cost 50,000 40,000 30,000 20,000 10,000
Dep 10,000 10,000 10,000 10,000 10,000
Acc Dep 10,000 20,000 30,000 40,000 50,000
WDV 40,000 30,000 20,000 10,000 0

Tax base 20X1 20X2 20X3 20X4 20X5

Cost 50,000 37,500 25,000 12,500 0
Dep 12,500 12,500 12,500 12,500 0
Acc Dep 12,500 25,000 37,500 50,000 0
WDV 37,500 25,000 12,500 0 0

Acc base
Acc dep 37,500 25,000 12,500 0 0
Tax dep 12,500 12,500 12,500 12,500 0
Diff 25,000 12,500 0 -12,500 0
Cum -2500 10,000 10,000 -2,500 -2,500
tax % -1000 4000 4000 -1000 -1000

PBT
Current Ta 20,000 20,000 20,000 20,000 20,000
Deff. 1000 2000 3000 4000 0
on a straight-line basis over

t-line basis.

1 2 3 4 5
PBT 20,000 20,000 20,000 20,000 20,000
ADD Acc dep 10,000 10,000 10,000 10,000 10,000
MINUS Tax dep 12,500 12,500 12,500 12,500 0
Taxable 17,500 17,500 17,500 17,500 30,000
Charge 7000 7000 7000 7000 12000
tax adj 1000 1000 1000 1000 -4000
tax liablity 8000 8000 8000 8000 8000
A company purchased an asset costing $1,500. At the end of 20X8 the carrying amount is $1,000. The cumulative depreciation

Tax base
Cost 1,500
Tax dep -900
WDV 600

Acc base 1000

Deffered
Acc 1000
Tax 600
400
25%
DTL 100
0. The cumulative depreciation for tax purposes is $900 and the current tax rate is 25%. Required Calculate the deferred tax liability for the
he deferred tax liability for the asset.