Asked by
terry bryant
on Dec 07, 2024
Verified
The following information relates to Jefferson Limited for the year ended 30 June 2022. Accounting profit before income tax (after all expenses have been included) $200 000
Entertainment expenses (not tax deductible) 10 000
Depreciation of machinery (accounting) 20 000
Depreciation of machinery (tax) 50 000
Annual leave expense (not a tax deduction until the leave is paid) 4 000
Income tax rate 30%
On the basis of this information the current tax liability is:
A) $55 200.
B) $64 800.
C) $45 000.
D) $51 000.
Current Tax Liability
The amount of income taxes a company is obligated to pay to governmental authorities within the next fiscal period.
Tax Deductible
Tax deductible refers to certain expenses or investments that can be subtracted from gross income to reduce the amount of income subject to tax.
Depreciation
The allocation of the cost of a tangible asset over its useful life, reflecting the decrease in value due to use and wear and tear.
- Calculate current tax liability based on taxable income.
Verified Answer
DS
Learning Objectives
- Calculate current tax liability based on taxable income.