The financial statements of Dekar Corp. for a four-year period reflected the following pre-tax amounts: Statement of Profit and Loss (sumarized) Revenues Expenses other than depreciation Depreciation expense (straight line) Pre-tax accounting income 20x4 $110,000 (80,000) (10,000) $ 20,000 2005 $124,000 (92,000) (10,000) $ 22,000 20x6 $144,000 (95,000) (30,000) $ 39,000 2017 $164,000 (128,000) (10,000) $ 26,000
The financial statements of Dekar Corp. for a four-year period reflected the following pre-tax amounts: Statement of Profit and Loss (sumarized) Revenues Expenses other than depreciation Depreciation expense (straight line) Pre-tax accounting income 20x4 $110,000 (80,000) (10,000) $ 20,000 2005 $124,000 (92,000) (10,000) $ 22,000 20x6 $144,000 (95,000) (30,000) $ 39,000 2017 $164,000 (128,000) (10,000) $ 26,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The financial statements of Dakar Corp. for a four-year period reflected the following pre-tax amounts:
Statement of Profit and Loss (summarized)
20x4
$110,000
(50,000)
(10,000)
$ 20,000
Revenues
Expenses other than depreciation
Depreciation expense (straight-line)
Pre-tax accounting income
Machine (four year life, no residual value), at cost
Less: Accumulated depreciation
Deferred income tax balance
Net income
Statement of Financial Position (partial)
28X4
2005
$124,000
20X4
(92,000)
(10,000)
20x5
$ 22,000
20XE
Dakar has a tax rate of 40% each year and claimed CCA for income tax purposes as follows: 20x4, $16,000; 20x5, $12,000; 20x6.
$8,000; and 20x7. $4,000. There were no deferred income tax balances at 1 January 20X4
28X6
$144,000
(95,000)
(10,000)
$ 39,000
Required:
For each year, calculate the deferred income tax balance on the statement of financial position at the end of the year, and also net
income. (Negative amounts and deductible amounts should be indicated by a minus sign.)
20x7
$164,000
(128,000)
(10,000)
$ 26,000
2005
20x6
40,000 3
$ 40,000 S 40,000 $
(10.000) (20,000) (30,000)
$30,000 $ 20,000 $ 10,000 S
20X7
20x7
40,000
(40,000)
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