Question

a company has purchased a xerox machine for 15676 .it will work for 5 yrs and has no salvage value .the tax rate is 45% and annual revenues are constant at 8000 for financial reporting ,spm method used,but for tax purposes depreciation is 35% for first 2 years and remaining 30% for year 3.Ignore all other expenses other than depreciation,what is deffered tax liability at end of year 3?​

Answer 1

Answer:

vxjxgdhx

Explanation:

bdkdjfxjdkbdvdvx to you and your

Answer 2

Deferred tax liability at the end of three years will be 784

Deferred tax liability refers to all the taxes during a financial year that is unpaid but owed that are expected to be paid in the future.

In this question,

The company decreases the rate of depreciation than the tax slab ultimately leading to inflation in gross profit for that particular financial year.

The original value of the xerox machine                                 15676

Tax Rate                                                                                      45%

Annual revenues                                                                      8000

Depreciation for first two years                                                5487

     (15676*35/100)                  

Depreciation for remaining third year                                      4703

     (15676*30/100)        

Now, Depreciation for the tax purpose will be 5487+4703 = 10190

and Depreciation in the books of account will be 5487+ 5487 = 10974

Therefore, Deferred tax liability will be 10974-10190 = 784

#SPJ2