Question
In: Accounting
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine is expected to have a useful life of 5 years (straight-line basis) and no residual value. For taxation purposes, the ATO allows the company to depreciate the asset over 4 years. The profit before tax for the company for the year ending 30 June 2017 is $600,000. To calculate this profit the company has deducted $60,000 entertainment expense, and $80,000 salary expense that has not yet been paid. Also the company has included $70,000 interest as income that the company has not yet received. The tax rate is 30%.
Required: (a) Calculate the company’s taxable profit and hence its tax payable for 2017. (b) Determine the deferred tax liability and/or deferred tax asset that will result. (c) Prepare the necessary journal entries on 30 June 2017.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at the cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight-line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4 years.
The profit before tax for the company for the year ending 30 June
2017 is $600,000. To calculate this profit the company has deducted
$60,000 entertainment expense, and $80,000 salary expense that has...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4
years.
The profit before tax for the company for the year ending 30
June 2017 is $600,000. To calculate this profit the company has
deducted $60,000 entertainment expense, and $80,000 salary expense
that...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of $640,000. The machine...
Jaguar Ltd purchased a machine on 1 July 2016 at a cost of
$640,000. The machine is expected to have a useful life of 5 years
(straight line basis) and no residual value. For taxation purposes,
the ATO allows the company to depreciate the asset over 4 years.
The profit before tax for the company for the year ending 30 June
2017 is $600,000. To calculate this profit the company has deducted
$60,000 entertainment expense, and $80,000 salary expense that...
Question 1 Week 7 (7 marks) Jaguar Ltd purchased a machine on 1 July 2016 at...
Question 1 Week 7 Jaguar Ltd purchased a machine on 1
July 2016 at the cost of $640,000. The machine is expected to have
a useful life of 5 years (straight-line basis) and no residual
value. For taxation purposes, the ATO allows the company to
depreciate the asset over 4 years. The profit before tax for the
company for the year ending 30 June 2017 is $600,000. To calculate
this profit the company has deducted $60,000 entertainment expense,
and $80,000...
Freedom Co. purchased a new machine on July 2, 2016, at a total installed cost of...
Freedom Co. purchased
a new machine on July 2, 2016, at a total installed cost of
$49,000. The machine has an estimated life of five years and an
estimated salvage value of $6,700.
Required:
a-1.
Calculate the depreciation expense for each year of the asset's
life using Straight-line depreciation.
Year
Depreciation Expense
1
$8,460
2
$8,460
3
$8,460
4
$8,460
5
$8,460
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Calculate the depreciation expense for each year of the asset's
life using Double-declining-balance depreciation.
Year
Depreciation Expense...
Jaguar Corporation purchased a machine that had an original cost of $60,000 and an estimated residual...
Jaguar Corporation purchased a machine that had an original cost
of $60,000 and an estimated residual value of $10,000. The useful
life was expected to be 8 years and straight-line depreciation is
used. At December 31, 2006 (Jaguar’s annual year-end), the book
value of the machine was $35,000. Jaguar Corporation sold the
machine for $32,000 cash on October 1, 2007.
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On 1 July 2016, Soff Ltd purchased a 20 per cent shareholding in Willaott Ltd for...
On 1 July 2016, Soff Ltd purchased a 20 per cent shareholding in
Willaott Ltd for a cash consideration of $480 000. On the date of
acquisition, the shareholders’ equity of Willaott Ltd is shown
below: Share capital $1 900 000 Retained earnings $ 500 000 Total
shareholder’s equity $2 400 000 Additional information: For the
year ending 30 June 2017 Willaott Ltd recorded an after-tax profit
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Duluth Ranch, Inc. purchased a machine on July 1, 2018. The cost of the machine was...
Duluth Ranch, Inc. purchased a machine on July 1, 2018. The cost
of the machine was $34,000. Its estimated residual value was
$10,000 at the end of an estimated 5-year life. The company expects
to produce a total of 20,000 units. The company produced 2,500
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Required:
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AZA Company purchased a machine on July 1, 2019. The machine
cost $400,000 and has an estimated residual value of $40,000. The
expected useful life is 8 years. The machine is to be used for
100,000 machine hours. AZA’s year end is December 31. Required:
a. Calculate the depreciation expense for 2019 and 2020 using
the straight-line method. Also list the Accumulated Depreciation
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b. Calculate the depreciation expense for 2019 and...
On 1 July 2022, Monkey Ltd leased a plastic‐moulding machine from Wise Ltd. The machine cost...
On 1 July 2022, Monkey Ltd leased a plastic‐moulding machine
from Wise Ltd. The machine cost Wise Ltd $65 000 to manufacture and
had a fair value of $77 055 on 1 July 2022. The lease agreement
contained the following provisions.
Lease term
4 years
Annual rental payment, in advance on 1 July each year
$20 750
Residual value at end of the lease term
$7 500
Residual guaranteed by lessee
Nil
Interest rate implicit in lease
8%
The lease...
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