Kk.74. Company AA provides the following financial information at the accounting year-end 31/12/2022: Sales Revenue equals£50,25050,250 and Total Expenses equal £23,00023,000. From the total amount of expenses, £12,60012,600 correspondto penalties. The statutory tax rate is 20%20%. Considering this information, which of the following statements is true?a.There exists a permanent difference and current tax expense equals £7,9707,970.b.The current tax expense amounts to £5,4505,450.C.The accounting profit before tax is £39,85039,850.d.None of the answers is true.

There are two types of differences in deferred tax - Permanent and Temporary. Permanent differences…

Answered: Company AA provides the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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From the following information for R Ltd. for the year ended 31 March, 2016, calculate the deferred tax asset/ liability as per AS-22 Accounting Profit. ₹10,00,000 Book Profit as per MAT(|Minimum Alternate Tax. ₹9,00,000Profit as per income Tax Act. ₹1,00,000Tax Rate 30%MAT Rate 10%
1) The estimate of current tax made by Boo Ltd for the year ended 31 December2019 was £15,000 different from the actual tax liability. This resulted in a debitbalance in the trial balance at 31 December 2020.The current tax liability for the year to 31 December 2020 is estimated to be£275,000.What is the current tax expense in the statement of profit or loss for the yearended 31 December 2020?a) £15,000b) £290,000c) £275,000d) £260,000 2) A company’s trade payables days and trade receivables days are 60 daysand 30 days, respectively.The sales and purchase information for the year was as follows:Sales Purchases£m £mCash 27 10Credit 35 18Total 62 28What was the trade receivables and trade payables balances at the year end?a) £5.10m and £4.60mb) £2.21m and £1.64mc) £5.75m and £1.48md) £2.88m and £2.96m Please solve question 1 and 2
Exco plc’s accountants have prepared the following IFRS income statement summary for the year ended 31 December 20X1: Amounts in £ Year 20X1 Total revenue 100,000 Total expenses 70,000 * Profit before tax 30,000 * includes a non-deductible expense (see below) The following information is also available: - Exco plc’s expenses include £10,000 for a penalty charge which is not tax-deductible. - The statutory tax rate on corporate profits is 20%. The current tax (expense) reported for the year ended 31 December 20X1 is: a. £3,000 b. £6,000 c. £8,000 d. £9,000 e. £13,000
Required Answer each of the following questions by providing supporting computations. 1. Assume that the company’s income tax rate is 30% for all items. Identify the tax effects and after-tax amounts of the three items labeled pretax. 2. Compute the amount of income from continuing operations before income taxes. What is the amount of the income tax expense? What is the amount of income from continuing operations? 3. What is the total amount of after-tax income (loss) associated with the discontinued segment? 4. What is the amount of net income for the year?
Required: 1. Determine the amounts necessary to record Allmond's income taxes for 20: Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million 2. What is Allmond's 2021 net income? for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Prepare the appropriate journal entry. (If no entry is required for a transaction/e account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5 View transaction list 1 Record 2021 income taxes. X Cr 2022 2023 2024 2025 $2 million 2 million 1 million 3 million 35% 35% 35% 25% Required: 1. Determine the amounts necessary to…
A company is preparing its financial statements for the year ending 31 March 2020. The initial trial balance has the following figures relating to tax Income tax payable at 1 April 2019 £25,325 Icome tax paid during the year ended 31 March 2020 £15,225 The estimated income tax liability for the year ended 31 March 2020 is £16,650. What is the income tax figure for inclusion in the company's statement of profit or loss for the year ended 31 March 2020?
FGH Corporation had the following in 2021: Sales P 3.4M; Cost of sales P 1.2M; Admin expense P 0.3M; Selling expenses P .5M; other taxable income from operations P .1M. 1. What is deductible expense if the company uses OSD? 2. Using the problem above, what is the income tax payable?
Prey ltd accountant has estimated current tax of 50 000 based on the current profit. The income tax value of the non-current assets are 75 000 and the carrying amount of non-current assets as at 31 December 2020 is 90 000.Tax rate is 22%. Using the information given above,calculate the deferred tax for the year ended 31 December 2020
At 30 June 20X3, the gross amount of the accounts receivable of Atom Ltd (Atom) was $10 000. At the same date, there was a related allowance for doubtful debts of $500. Revenue from sales is included in the statement of profit or loss and other comprehensive income in the same period as it is included in taxable profit. The tax rate is 30 per cent. At 30 June 20X3, Atom would recognise which one of the following items in its statement of financial position? a. deferred tax liability of $2850 b. deferred tax asset of $2850 c. deferred tax asset of $150 d. deferred tax liability of $150
The following facts relate to a company for 2021: Income tax payable $150,200 Income tax expense 242,700 Taxable income 448,000 Pretax financial income 873,000 What is the effective income tax rate for 2021? Very important: Please present your answer in percentage format, and round the percentage amount to 2 decimal places if necessary. For example, your answer should look like 23.45% or 23.45 (the percentage sign, %, is optional), not 0.2345.
The following are details to calculate tax expense, tax payable and deferred taxes: Descriptions Gross Income: 2018:RM500,00.00; 2019: RM600,000.00; 2020: RM750,000.00; 2021: RM700,000.00 Heavy machinery with cost of RM300, 000.00 is depreciated annually for 10% using straight line method. Under tax rules, initial allowance is 20% and annual allowance is 2 20%. Rent revenue for rental of office space is RM3,000.00 per month (RM36,000.00 per annum) and shop outlet is RM5,000.00 per month (RM60,000.00 per annum). Office space rental received 2 years in advance for 2018. Meanwhile, shop outlet rental is accrued with balance brought forward RM10,000.00 in 2018; received 3 months advance in 2019 and 4 months accrued 2021. Recognized provision of warranty RM8,000.00 in 2018; RM10,000.00 in 2019; RM10,000.00 in 2020 and RM 15,000.00 in 2021. Warranty expenses claims were RM6000.00 for 2018; RM10,000.00 for 2019; RM12,000.00 for 2020 and RM11,000.00 for 2021. Tax rate is 25% 3 REQUIRED: a.…
The following information applies to the operations of MK Inc. for 2022 and 2023. Assume a tax rate of 20% for both years.2022 information:Sales on account in the amount of $675,000Warranty expense and associated liability in the amount of $145,000No other expenses incurred.2023 information:Sales on account in the amount of $210,000Warranty repairs made in the amount of $69,000No expenses incurred.What is MK's income tax expense for 2022? Group of answer choices $121,200 $135,000 $106,000 $164,000

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