AFF2491 Assignment Tasks (15 Marks) Semester 1, 2013 Assignment - AFF2491 Company Reporting Semester 1 2013 This assessment task is designed to test a student’s achievement of objectives 1, 2, 3 and 4 (refer to AFF2491 Unit Guide). It is an individual assessment task. This assignment must be handed in for successful completion of this unit. It will contribute 15% towards the final mark in this unit. The assignment consists of: Part B (7 Marks) Accounting for income tax Part C (8 Marks) Consolidation This assignment is due on Friday 10 May 2013 by 5:00pm (Week 9). Students are required to submit a hard copy in the assignment box located at Level 3, Building H, Caulfield Campus. Electronic lodgement is NOT acceptable. The …show more content…
Income tax expense 4,500 Cr. Current tax liability 4,500 3 Solution (iii) Happy Star Ltd Tax worksheet for the financial year ended 31 December 2012 Particulars Carrying Amount (CA) 60,000 45,000 Tax Base (TB) Plant Goodwill Excluding Goodwill Net temporary differences Deferred tax liability 30% Beginning DTL balance Change in DTL (adjustment) 50,000 0 Taxable Temporary Differences (TTD) 10,000 45,000 55,000 45,000 10,000 3,000 1,500 1,500 Deductible Temporary Differences (DTD) 0 0 0 0 0 0 0 0 Solution (iv) Journal entry: Income tax expense Deferred tax liability $1,500 $1,500 4 Question (b) 3.5 marks (1) Prepaid rent: Opening balance as at 1 January 2012 was $1,000; rent payment during the financial year amounted to $5,000; and ending balance as at 31 December 2012 was $2,000. Income tax rate was 30 per cent. (i) Prepare the calculation of deferred tax assets or deferred tax liabilities in relation to prepaid rent expense as at 31 December 2011 and 31 December 2012. (ii) Prepare journal entry to record the change in deferred tax assets or deferred tax liabilities
statements are for the fiscal year ended February 3, 2013.) The problem contains three major
1. The first step to evaluating the cash flows is to conduct the depreciation tax flow analysis. Depreciation is not a cash flow, but the depreciation expense lows the taxes payable for the company. As a result, the tax effect of deprecation needs to be calculated as a cash flow. There are two depreciable items on the company's balance sheet the building and the equipment. The equipment is known to have a seven year depreciable life, which will be assumed to be straight line. The building is also assumed to be subject to straight line depreciation, this time of forty years. The tax saving reflects the depreciation expense multiplied by the tax rate, which in this case is assumed to be 28%. The following table illustrates the tax effect in future dollars of the depreciation expense:
According to AASB 112, main principal of tax effect is to recognize deferred tax asset or deferred tax liability if it is probable that future recovery or settlement of asset or liability makes future tax payments larger or smaller. Requirements are to separately disclose main parts of tax expense, aggregate current and deferred tax relating to items recognized directly in equity, information demonstrating a relationship between tax expense & company’s accounting profit, and certain information relevant to temporary differences and deferred tax assets.
to FAC to cover 75% of operating costs and 90% of the capital costs for any projects
The $1,000 prepaid rent is taxed in the year of receipt. The Bluejay Apartments should use the first option. By doing so, it maximizes deferrals without affecting the cash flows
2) In 2013, Firm A paid $50,000 cash to purchase a tangible business asset. In 2013 and 2014, it deducted $3,140 and $7,200 depreciation with respect to the asset. Firm A’s marginal tax rate in both years was 35 percent. Compute Firm A’s adjusted basis in the asset at the end of each year. (part b)
(1) The payment is equal to 5% of gross rental income earned by the partnership, which is earned regardless of the overall net income of the partnership for the year.
1. Create and interpret Commonwealth’s statement of cash flows for 2013. What information does it provide regarding the HMO’s sources and uses of cash over the past year?
After careful study of this chapter, you will be able to: 1. 2. 3. 4. 5. 6. 7. 8. 9. Understand permanent and temporary differences. Explain the conceptual issues regarding interperiod tax allocation. Record and report deferred tax liabilities. Record and report deferred tax assets. Explain an operating loss carryback and carryforward. Account for an operating loss carryback. Account for an operating loss carryforward. Apply intraperiod tax allocation. Classify deferred tax liabilities and assets.
Submit via the coursework at Room No. 20 Administration Building Section A - To be completed by the student – PLEASE PRINT CLEARLY
(i) Complete the Imputation Credit Account entries for the above data, using the following format:
Detailed course programme Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 and 7 Framework, Accounts preparation and Non Current Assets Group accounts Inventories, Leases, Provisions, Substance over form Cashflows and Ratios Financial Instruments, Pensions, Deferred tax and Share based payment DipIFR
books and depreciated, and the lessee recognizes lease payments in the income statement in the period in which it is paid.
Paper F6 (IRL) Syllabus additions and deletions to better underpin the syllabus of Paper P6. This will include areas such as domicile, termination payments, and overseas aspects of VAT. http://www.accaglobal.com/students/acca/exams/f6/syllabus
Learner name Group 6 Date issue Completion date 10.02.2013 06.04.2013 Qualification Pre‐Master Course (Business Studies)