15. The following information was extracted from the financial records of Pineapple Limited: Equipment purchased on...

15. The following information was extracted from the financial records of Pineapple Limited: Equipment purchased on 1 July 2018 for $200 000 (accounting depreciation 10% straight line; tax depreciation 15% straight line). If the company tax rate is 30%, the deferred tax item that will be recorded by Pineapple Limited at 30 June 2019 is

Expert Solution

Solution:-

Asset value - $200,000

Accounting depreciation - 10% using straight line method -

200000*10% = 20000

Tax depreciation - 200000*15% using straight line method =

200000*15% = 30000

Difference in Income is 10000 - Income as per Income tax is low compared to book hence we have paid less tax and it will be deferred tax liability.

Entry for Deffered tax liability would be

Profit and Loss A/c Dr 3000 (10000*0.3)

To Deferred Tax Account 3000

ekkarill92 answered 1 year ago

The following information was extracted from the accounting records of Belle Mare Limited Statement of Comprehensive...

The following information was extracted from the accounting records of Belle Mare Limited Statement of Comprehensive Income for the year ended 31 December 2018 (R) 2017 (R) Sales 1 856 000 1 200 000 Cost of sales (1 280 000) (750 000) Gross profit 576 000 450 000 Operating expenses (291 200) (212 000) Depreciation 30 000 26 000 Other operating expenses 261 200 186 000 Operating profit 284 800 238 000 Interest on mortgage loan (24 000) (72 000)...

The following information has been extracted from the financial records of Platinum Ltd and its subsidiary...

The following information has been extracted from the financial records of Platinum Ltd and its subsidiary Serum Ltd at 30 June 2017. Income statement Platinum Ltd ($) Serum Ltd ($) Sales revenue 198,000 112,000 Cost of goods sold -149,000 -102,000 Gross profit 49,000 10,000 Dividend revenue 8,000 25,000 Depreciation expense -12,000 -11,000 Other expenses -8,000 -4,000 Profit before tax 37,000 20,000 Tax expense -11,100 -6,000 Profit for the year 25,900 14,000 Retained earnings – 30 June 2016 110,000 46,000 Interim...

Financial Statement Elements: Manufacturer The following selected information was extracted from the 20x1 accounting records of...

Financial Statement Elements: Manufacturer The following selected information was extracted from the 20x1 accounting records of Lone Oak Products: Raw material purchases $175,000 Direct labor 254,000 Indirect labor 109,000 Selling and administrative salaries 133,000 Building depreciation 80,000 Other selling and administrative expenses 195,000 Other factory costs 344,000 sales revenue ($130perunil) 1,495,000 *Seventy five percent of the company's building was devoted to production activities; the remaining 25 percent was used for selling and administrative functions. Inventory data: January1 December 31 Raw...

accounting question The following information has been extracted from the financial records of Associate Ltd at...

accounting question The following information has been extracted from the financial records of Associate Ltd at 1 April 2004 and at 31 March 2017. Associate Ltd 1 April 2004 Associate Ltd 31 March 2017 $ $ Sales 1 800 000 Less cost of goods sold 1 200 000 Gross profit 600 000 Less expenses 328 400 Profit before tax 271 600 Plus rental income 26 000 Less income tax expense 71 880 Profit after tax 225 720 Retained earnings- opening...

Question (i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423...

Question (i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423 Accounts Payable $1,721,669 Accounts Receivable $1,845,113 Notes Payable $2,113,345 Inventories $1,312,478 Total Current Assets $3,835,014 Total Current Liabilities $3,835,014 Net Sales $9,912,332 Cost $5,947,399 (b) What is the operating cycle for XERO Limited? (c) What can you say about XERO Limited’s accounts receivable and inventory management if it is known that the industry average operating cycle is 72 days? (d) Briefly explain what you...

The following information has been extracted from the financial statements of YDI Limited: Extract of Statement...

The following information has been extracted from the financial statements of YDI Limited: Extract of Statement of Comprehensive Income for the year ended 31 December 2019 2018 R R Sales 2 000 000 1 600 000 Cost of sales 940 000 800 000 Operating profit 600 000 520 000 Profit before tax 520 000 450 000 Profit after tax 364 000 315 000 Extract of Statement of Financial Position as at 31 December Assets 2019 2018 R R Non-current assets...

i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423 Accounts...

i) The following information is extracted from the financial statements of XERO Limited: Cash $677,423 Accounts Payable $1,721,669 Accounts Receivable $1,845,113 Notes Payable $2,113,345 Inventories $1,312,478 Total Current Assets $3,835,014 Total Current Liabilities $3,835,014 Net Sales $9,912,332 Cost $5,947,399 (a) Briefly explain what you understand by the term ‘operating cycle’. (1 mark) b) What is the operating cycle for XERO Limited? (1 marks c) What can you say about XERO Limited’s accounts receivable and inventory management if it is known...

QUESTION 1 The following trial balance was extracted from the books and records of Macaroon Limited...

QUESTION 1 The following trial balance was extracted from the books and records of Macaroon Limited as at 31 December 2015. Debit Credit £’000 £’000 Sales 2,347 Inventory at 1 January 2015 542 Purchases 1,932 Selling and distribution costs 87 Administrative expenses 21 Land – cost 750 Buildings – cost 3,500 Buildings – accumulated depreciation at 1 January 2015 415 Equipment – cost 530 Equipment – accumulated depreciation at 1 January 2015 83 Vehicles – cost 42 Vehicles – accumulated...

QUESTION FIVE [20] The following information has been extracted from the financial statements of YDI Limited:...

QUESTION FIVE [20] The following information has been extracted from the financial statements of YDI Limited: Extract of Statement of Comprehensive Income for the year ended 31 December 2019 2018 R R Sales 2 000 000 1 600 000 Cost of sales 940 000 800 000 Operating profit 600 000 520 000 Profit before tax 520 000 450 000 Profit after tax 364 000 315 000 Extract of Statement of Financial Position as at 31 December Assets 2019 2018 R...

QUESTION 5: The following information has been extracted from the financial statements of YDI Limited: Extract...

QUESTION 5: The following information has been extracted from the financial statements of YDI Limited: Extract of Statement of Comprehensive Income for the year ended 31 December: 2019 2018 $ $ Sales 2 000 000 1 600 000 Cost of sales 940 000 800 000 Operating profit 600 000 520 000 Profit before tax 520 000 450 000 Profit after tax 364 000 315 000 Extract of Statement of Financial Position as at 31 December: Assets 2019 2018...

Question