A) Sarasota Corp. follows IFRS and began operations in 2017 and reported account

Question

A) Sarasota Corp. follows IFRS and began operations in 2017 and reported accounting income of $289,000 for the year. Sarasota’s CCA exceeded its book depreciation by $46,500. Sarasota’s tax rate for 2017 and years thereafter is 30%.

In its December 31, 2017 statement of financial position, what amount of deferred tax liability should be reported?

B) At December 31, 2017, Blue Spruce Inc. owned equipment that had a book value of $174,000 and a tax base of $133,000 due to the use of different depreciation methods for accounting and tax purposes. The enacted tax rate is 30%.

Calculate the amount that Blue Spruce should report as a deferred tax liability at December 31, 2017.

Explanation / Answer

Ans 1 CCA exceeded book depreciation by $46,500 Tax rate 30% Deferred Tax Liability $13,950 ans 2 Tax depreciation exceeded book depreciation (174000-133000) 41000 Tax rate 30% Deferred Tax Liability $12,300

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