Bramble Corporation purchased equipment very late in 2017. Based on generous cap
ID: 2546385 • Letter: B
Question
Bramble Corporation purchased equipment very late in 2017. Based on generous capital cost allowance rates provided in the Income Tax Act, Bramble Corporation claimed CCA on its 2017 tax return but did not record any depreciation because the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $34,800 in 2018, $31,100 in 2019, and $46,700 in 2020. Bramble’s accounting income for 2017 is $237,200 and the tax rate is 34% for all years. There are no deferred tax accounts at the beginning of 2017.
Bramble Corporation purchased equipment very late in 2017. Based on generous capital cost allowance rates provided in the Income Tax Act, Bramble Corporation claimed CCA on its 2017 tax return but did not record any depreciation because the equipment had not yet been put into use. This temporary difference will reverse and cause taxable amounts of $34,800 in 2018, $31,100 in 2019, and $46,700 in 2020. Bramble’s accounting income for 2017 is $237,200 and the tax rate is 34% for all years. There are no deferred tax accounts at the beginning of 2017.
calculate the deferred tax asset liability for 2017?
Explanation / Answer
Answer
Deferred Tax asset liability at December 31, 2017
Particulars 2018 2019 2020 Reversal of temporary differences - Depreciation 34800 31100 46700 Tax Rate 34% 34% 34% Deferred Tax Liability 11832 10574 15578Related Questions
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