Rockford Plc prepares financial statements to 31 December each year. On 1 January 2020 Rockford plc purchases plant and machinery for £2,400,000 which has a useful life of 8 years with no residual value. The tax authorities do not allow depreciation as a deductible expense. Instead, the tax authority gives capital allowances each year at a rate of 20% on the tax written down value each year. The corporation tax rate is 22%. Rockford Plc has estimated that its current tax liability for the year ended 31 December 2021 is £106,000. Calculate the amount of deferred taxation to be shown in the statement of financial position as at 31 December 2020 and as at 31 December 2021, and show the Statement of Financial Position extracts for 2020 and 2021.
Q: The Larisa Company is exiting bankruptcy reorganization with the following accounts: Book…
A: Journal entry is a process of initially recording and classifying business transactions into books…
Q: List 2 cash management practices that banks and retail companies sometimes implement to prevent cash…
A: Cash larceny is theft of cash after recording such cash in books of accounts. Employees involves in…
Q: Comment on the movements in the ratios over two years and adequacy of the level of gearing and…
A: Financial ratios refers to the ratios which determine the line items of the financial items of the…
Q: Q9. Which of the following are generally not considered motives for mergers? Desire to achieve…
A: A merger refers to a strategic move wherein one or more companies is united with another company and…
Q: 1. Define "Ethics" in your own words. Using an example, explain how it is related to decision…
A: Comment - We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: If equity increased by $15 000 and total liabilities increased by $35 000 over a period, by how much…
A: The assets represent the sum of liabilities and equity. The company borrows funds to acquire assets…
Q: The following changes took place last year in Pavolik Company’s balance sheet accounts: Asset…
A: Statement of cash flow is prepared by analyzing the increase and decrease in the assets/…
Q: You have developed a self-study certification system for those who need credit hours for…
A: In this question as per given matric we will calculate segmentwise revenue by…
Q: A new restaurant has recently opened in your community and it is a huge success with an average of…
A: In order to make a decision about whether or not to purchase the dish-washing machine, we need to…
Q: Please assist Prepare a Trade Payables reconciliation statement as at 31 March and 30 April.
A: The trade payable reconciliation is the process that involves comparing balances in two or more sets…
Q: During an operational audit, Lily, an audit staff assigned to a company’s major subsidiaries,…
A: Inventory turnover refers to the rate at which a business replaces inventory as a result of sales in…
Q: Land Transactions on the Statement of Cash Flows IZ Corporation purchased land for $500,000. Later…
A: The cash flow statement is one of the financial statements of the business. The various activities…
Q: This answer is incorrect I even sent you a screenshot showiung you equipment is not right you sent…
A: Equipment is the type of asset which falls to company or any non-profit organisation under the fixed…
Q: January 1, 2020, Caleb Co acquired the following intangible assets: A trademark for…
A: An impairment loss is the carrying amount of an asset that is in excess of its recoverable amount.…
Q: Question 9 Assume that once you have done the analysis, you have found that it is visible to run the…
A: Funding is the most critical part of starting a business since it cannot be started without it.…
Q: 3. Frisco Company recently purchased 108,000 units of raw material for $583,200. Three units of raw…
A: The variance is the difference between standard data and actual costs incurred during the period.…
Q: E18-9 (Allocate Transaction Price) Sanchez Co. enters into a contract to sell Product A and Product…
A: As per the given information: Standalone Selling pricesPercent alllocated Allocated amountsProduct A…
Q: Prepare an Income Statement for year ended 30 June.
A: Income statement is prepared by the business organization so as to know how much amount of gross…
Q: Given the following cost and activity observations for Bounty Company's utilities, use the high-low…
A: Introduction: The cost of electricity, temperature, sewer, and water ingested during a reporting…
Q: Interest on current is an example of a timing difference. True or False Direct deposit is an example…
A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…
Q: The manufacturing costs of Calico Industries for three months of the year are provided below:…
A: The high low method is used to separate the fixed and variable costs from the mixed costs of…
Q: What is the Investment Turnover for Stevenson Corporation, given the following info: Invested Assets…
A: Investment turnover: Investment turnover is a financial ratio that measures the efficiency of a…
Q: (a) Why is the BSC approach to performance measurement more useful for measuring performance for…
A: The Balanced Scorecard is a method which displays organization's performance into four dimensions…
Q: Berg Industries, a family-run small manufacturer, has adopted an ABC costing system. The following…
A: The total cost of job is calculated as sum of direct materials, direct labor and overhead applied…
Q: Marketing manager suggests the company should sell CHANTEQ in both states as he is confident the…
A: Lets understand the basics. For maintaining annual profits, management would need to cover current…
Q: Which of the following is true about the 10% test?
A: Company as per the standard and guideline have to report about which section or the division which…
Q: Mpho cannot understand why the balance of her bank account in the general ledger does not balance to…
A: Introduction: A bank statement is a list of any and all transactions for a specific time period,…
Q: rder is an example of an adjusting difference. True or False Bank understates a deposit on the bank…
A: Adjusting differences are necessary in the account when there is mismatch between the debit and…
Q: 14. In activity-based costing is assumed that indirect costs are generated by: A. Indirect labour B.…
A: Since multiple questions have been posted, only the first question will be solved as per the…
Q: Introduction and client background You are an audit senior in Riskam and Co and you are commencing…
A: Introduction: Audit risk is defined as "the risk that the auditor will express an irrelevant audit…
Q: All nine transactions for Homes Realty, Inc. for June, the first month of operations, are recorded…
A: The financial statements of the business include the income statement and balance sheet. The…
Q: Which of the following statements is/are correct criteria of the good tax? a. Good taxation should…
A: Fairness, sufficiency, simplicity, transparency, and administrative convenience are the five…
Q: If sales are $295,000, variable costs are 75% of sales, and operating income is $51,500, the…
A: The contribution margin is calculated as difference between sales and variable costs. The operating…
Q: What examples can be explained as the type of technical training and proficiency auditors must have…
A: The auditor must have adequate technical training and proficiency to perform the audit. the…
Q: You are the audit team assign to audit the unaudited set of financial statements for XYZ Company…
A: Audit procedure refers to the method or way of collecting as well as analysing the data for…
Q: The Runner Antique Mall expects to make purchases in the first quarter of 2021 as follows: January…
A: Introduction: A cash disbursement is a payment made in exchange for goods or services. A cash…
Q: On December 20, 2020, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a…
A: Introduction: An income statement is a financial report that details the company's earnings and…
Q: For each of the following accounts, select the correct account type. Accounts payable Accounts…
A: Stockholders Equity :— It is the remaining balance in balance sheet after paying all liabilities…
Q: The management of Kunkel Company is considering the purchase of a $20,000 machine that would reduce…
A: 1) Net present value of the investment in the machine:- First of all we need to calculate Present…
Q: If fixed costs are $859,000 and variable costs are 60% of sales, the break-even point in sales…
A: Break Even Point in Sales Dollar = The Break-even point is the point where the company has recovered…
Q: An auditor working with a publicly traded client learns that the client has been completing stock…
A: Auditor has to find out and determine the authenticity of the financial statements and also have to…
Q: Johnson Marine has the following costs and expected sales for the coming year. Johnson is…
A: Cost per unit can be calculated by dividing the total cost of the product by the total number of…
Q: The standard costs and actual costs for factory overhead for the manufacture of 2,700 units of…
A: Total Factory Overhead Cost Variance = Variable overhead cost variance + Fixed overhead cost…
Q: The reason for charging indirect costs to cost centres is to: A. Calculate the cost of direct…
A: Lets understand the basics. Indirect costs are cost which are not directly related to product or…
Q: How would an auditor communicate known there are violations of the law and the auditor's…
A: Audit is the process in which auditor independently examined the financial information of any type…
Q: What is the Residual Income for Stevenson Corporation, given the following info: Invested Assets =…
A: Residual income is the excess of income over the minimum required rate of return. It indicates the…
Q: Kitchen Enterprises is evaluating a proposal to lengthen its credit period from 30 to 45 days. All…
A: Accounts receivables are those customer accounts to whom business has made credit sales on account…
Q: Deacon Corporation has provided the following financial data from its balance sheet and income…
A: Debt to equity ratio :— It is the ratio of total liabilities to total shareholders equity. All…
Q: Management at Marvin Limited has provided the following budgeted and actual annual figures for one…
A: According to the given question, we are required to solve the following questions. Introduction of…
Step by step
Solved in 3 steps
- Kucing Garong Construction Company decided at the beginning of 2020 to change from the cost recovery method to the percentage-of-completion method for financial reporting purposes. The company will continue to use the cost-recovery method for tax purposes. For years prior to 2020, pretax income under the two methods was as follows: percentage-of-completion £144,000, and cost-recovery £114,000. The tax rate is 35%. Kucing Garong has a profit-sharing plan, which pays all employees a bonus at year-end based on 1.5% of pretax income. What is the amount of the indirect effect of Kucing Garong’s change in accounting policy that will be reported in the 2020 income statement, assuming that the profit-sharing contract explicitly requires adjustment for changes in income numbers?GGS Corp. reports a net operating loss for 2023 of $1,343,000. Last year the company reported taxable income of $604,000 and in 2021 the company reported taxable income of $672,000. If the tax team has decided to use the carryback provision, what will be the company's tax refund in 2023, assuming the tax rate for all three years is 25%? O $151,000 O $335,750 O $168,000 O $319,000 KObi Ltd made a trading profit of £739,000 for the nine month period ended 30 September 2021. On 1 February 2021, Obi Ltd sold a warehouse. This resulted in a chargeable gain of £120,000. On 1 August 2021, Obi Ltd made a qualifying charitable donation of £5,000. Obi Ltd has a capital loss brought forward from the year ended 31 December 2020 of £20,000. What is Obi Ltd's corporation tax liability for the nine month period ended 30 September 2021? £118,845 O£158,460 £162,260 £159,410
- On December 31, 2023, XYZ Inc. has an account payable of $2,000 for operating expenses incurred during the year. These expenses are only tax deductible when paid. XYZ normally pays for its operating expenses one month after they are incurred. Assuming a 20% tax rate, these expenses will result in: Multiple Choice О A deferred tax liability of $2,000. A deferred tax liability of $400. A deferred tax asset of $400. A deferred tax asset of $2,000.Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $632 million in sales of this type. Scheduled collections for these sales are as follows: 2021 2022 2023 2024 2025 Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. O $62 million. $ Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2021 balance sheet? (Round your answer to the nearest whole million.) O $584 million. 62million 122million 138million 153million 157million $ 632million O $134.5 million. O $143 million.The accountant for Lajamanu Production Ltd has the task of preparing the deferred tax entries in the year-end financial statements at 30th June 2022. The company has been expensing research in a new product for a number of years. The directors are now of the opinion that the product will have a viable market and that further expenditure can be capitalised as a development asset. With this in view $160,000 was expended on 1st July 2021. It is believed that this expenditure will be recovered over a five year period and is to be amortised on a straight line basis at 20% per annum. The project does not qualify for any accelerated tax deductions over and above the full cost incurred. Required As the accountant has only recently been recruited you have been asked to complete the preparation of the journal entry adjustments for any temporary tax differences and to explain in each of the situations given above the reasons for the adjustments, why the accounts have been chosen…
- You are provided the following transactions which occurred during the tax year which 31 December 2022 for Serowe Ltd. The company disposed some of its Heavy Plant and Machinery that it had bought on 30 November 2020 for P1,200,000. The company received P350,000. Serowe Ltd bought new Plant and Machinery to replace the disposed ones for P3,200,000. Assume that the company elects to apply rollover relief, calculate the capital allowances on the new plant and machinery for the current tax year.Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation. Cash 150,000 Unearned Rent Revenue 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. What amount of income tax expense should Kraft Company report at the end of 2025? 3) _______ A) $267,500 B) $211,250 C) $192,500 D) $117,500Fitzroy Pty Ltd is an Australian company. During the 2020/21 financial year Fitzroy Pty Ltd had income of $4,000,000 and deductions of $500,000. What is the total tax payable for Fitzroy Pty Ltd for the 2020/21 financial year? (Assume 2020/21 Company Tax Rate will be 30%)
- J-Matt, Inc., had pretax accounting income of $329,000 and taxable income of $372,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $43,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022-2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt's income taxes for 2021 and prepare the appropriate journal entry.Bird Company reported $350,000 in book income before income tax during 2021, its first year of operation. The tax depreciation exceeded its book depreciation by $30,000. The tax rate for 2021 and future years is 21%. What amount of deferred tax liability should Bird report in its December 31, 2021 balance sheet? If Bird paid no estimated taxes, what amount of income tax payable should Bird report in its December 31, 2021 balance sheet?Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Included in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book and tax purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability? OA. $14,000 deferred tax liability B. $28,000 deferred tax liability OC. $28,000 deferred tax asset OD. $14,000 deferred tax asset