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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Subject: Corporate Accounting
Q) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000,
Required:
Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment.
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- Aa.2arrow_forwardDavid Ltd commences operations on 1 July 2020 On the same date, it purchases a machine at a cost of $1000 000 The machine is expected to have a useful life of 4 years, with benefits being uniform throughout its life. It will have no residual value at the end of 4 years Hence, for accounting purposes the depreciation expense would be $250 000 per year For taxation purposes, the ATO allows the company to depreciate the asset over three years—that is, $200 000 per year The profit before tax of the company for each of the next four years (years ending 30 June) is $600 000, $700 000, $800 000 and $900 000 respectively The tax rate is 30 per cent. Required: 1. Calculate the taxable profit on 30 June 2021, 30 June 2022, 30 June 2023.2. Record the necessary journal entries.arrow_forwardQuestion oneAbani Limited acquired a machinery on 1/1/2020 for K200,000. The company depreciates the machinery at 25% per annum on cost. The company`s tax rate is 35% and that the year end is 31/12.The company is entitled to the following capital allowances:Year K2020 100,0002021 100 0002022 02023 0The company also had the following profits before tax but after depreciation as follows:Year K2020 125,0002021 140,0002022 175.0002023 192,000You are required to prepare the profit and Loss account extracts for all the yearsa) Ignore Deferred tax b) Include deferred tax c) Statement of Financial position (extracts) for the years 2020 to 2023arrow_forward
- ) On 1 July 2016 Liala Ltd sold an item of plant to Jordan Ltd for $450000 when its’ carrying value in Liala Ltd book was $600000 (costs $900000, accumulated depreciation $300000). This plant has a remaining useful life of five (5) years form the date of sale. The group measures its property plants and equipment using a costs model. Tax rate is 30 percent. Please answer the below :1: Pass the necessary entries on 30 June 2017 and 30 June 2018 to eliminate the intra-group transfer of equipment.arrow_forwardInfinity Production acquired a new machine at the beginning of the current year. The machine cost $900,000 with no residual value expected. Infinity uses the straight-line method for financial reporting, assuming a 6-year useful life. The firm classifies the equipment as 5-year MACRS property for tax purposes using the following percentages. Year MACRS (%) 1 20.00% 2 32.00 3 19.20 4 11.52 5 11.52 6 5.76 The company is subject to a 20% income tax rate and has no other book-tax differences. Income before depreciation and tax is presented below: Year Income before Tax and Depreciation 1 $450,000 2 500,000 3 570,000 4 700,000 5 820,000 6 950,000 What is Infinity's deferred tax asset or deferred tax liability at the end of year 3? Group of answer choices $38,160 deferred tax liability $2760 deferred tax liability $2760 deferred tax asset $38,160 deferred tax asset PreviousNextarrow_forwardYokoyama Company owns a machine with a cost of $92,000 and accumulated depreciation of $18,500 that can be sold for $66,000 less a 5% sales commission. Alternatively, Yokoyama Company can lease the machine to another company for 3 years for a total of $74,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Yokoyama Company on the machine would total $10,500 over the 3 years. Prepare a differential analysis on February 21 as to whether Yokoyama Company should lease (Alternative 1) or sell (Alternative 2) the machine. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machine (Alt. 1) or Sell Machine (Alt. 2) February 21 Differential Effect Lease Sell Machine Machine (Alternative 2) (Alternative 1) (Alternative 2) Revenues Costs Profit (loss) Should Yokoyama Company lease (Alternative 1) or sell (Alternative 2) the machine?arrow_forward
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