How to Do Assignment

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Date| Details| Debit| Credit|
30 June 2012| Elimination of intragroup service fully paidService Revenue Service Expense| 60,000| 60,000| 30 June 2012| Elimination of unrealised profit in opening inventoryRetained EarningsIncome tax expense Cost of Sales| 3,5001,500| 5,000| 30 June 2012| Elimination of unrealised profit in closing inventorySales Revenue Cost of Sales InventoryDeferred Tax Asset Income Tax Expense| 108,0004,800| 92,00016,0004,800| 30 June 200930 June 2012| Transfer of non-current asset at 30/06/2009Gain on sale EquipmentDeferred Tax Asset Income Tax ExpenseDepreciation of computer three years after transferRetained EarningsDeferred Tax Asset ComputerAccumulated Depreciation Depreciation Retained EarningsIncome Tax ExpenseRetained Earnings Deferred Tax Asset| 6,0001,8004,2001,8003,600360720| 6,0001,8006,0001,2002,4001,080| 30 June 2012| Intragroup borrowingsLoan Payable Loan ReceivableInterest Revenue Interest ExpenseInterest Payable Interest Receivable| 1,850,00090,00040,000| 1,850,00090,00040,000| 30 June 2012| Transfer of non-current assetGain on sale VehicleDeferred Tax Asset Income Tax ExpenseAccumulated Depreciation Depreciation Income Tax Expense Deferred Tax Asset| 5,000 1,5001,666.67500| 5,0001,5001,666.67500|

Question 2)

Robinhood Pty Ltd
Tax worksheet for the year ended 31 December 2010

Particulars| Carrying Amount(CA)| Tax Base(TB)| Taxable Temporary Differences (TTD)| Deductible Temporary Differences (DTD)| Assets| | | | |
Plant| 100,000| 105,000| | 5,000*|
Liabilities| | | | |
| | | | |
Total Temporary differences| | | 0| 5,000|
Tax rate| | | 30%| 30%|
DTA on 31 December 2010| | | | 1,500 Dr|
DTL on 31 December 2010| | | 0| |

*since DTA =1500, assuming tax rate = 30% so we have deductible temporary differences (DTD) = 1500/30%= 5000 (as DTD leads to DTA)

DTA as at 31 Dec 2010 = 1500 Dr DTL as at 31 Dec 2010 = 0 --------- DTA balance after offsetting with DTL as at 31 Dec 2010 1500 Dr

Opening balance of DTA as at 1 Jan 2011 = $1500 Dr

ii)
Robinhood Ltd
Determination of Taxable Income (for year ended 30 Dec 2010) | | |
Accounting profit before income tax| | 10,000|
| | |
Add:Non-deductible expense| | |
Depreciation – Plant (accounting base)Revenue assessable for tax| 25,000 0| 25,000| Deduct:Deductible expenseDepreciation- Plant (tax base)Non-assessable revenue for tax| 20,0000| (20,000)| Taxable income| | 15,000|

Current tax liability @ 30%| | 5,000|

iii)
Robinhood Pty Ltd
Tax worksheet for the year ended 31 December 2011
Particulars| Carrying Amount(CA)| Tax Base(TB)| Taxable Temporary Differences (TTD)| Deductible Temporary Differences (DTD)| Assets| | | | |
Plant| 75,000| 85,000*| | 10,000|
Liabilities| | | | |
| | | | |
Total Temporary differences| | | 0| 10,000|
Tax rate| | | 30%| 30%|
DTA on 31 December 2011| | | | 3,000 Dr|
DTL on 31 December 2011| | | 0| |
Beginning balance| | | | 1,500|
Movement/adjustment during the year| | | | 1,500|

*since the carrying amount of plant after one year = initial cost- depreciation = 100,000-25,000=75,000 and the cumulative deductible temporary difference (DTD) in relation to plant as at 31 December 2011 was 10,000, so we obtain the tax base of plant after one year is equal to 85,000. The depreciation rate of plan...
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