QUESTION 1: (5 marks) Bolous Ltd purchased a depreciable asset for $100,000, at...
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Accounting
QUESTION 1: (5 marks)
Bolous Ltd purchased a depreciable asset for $100,000, at the beginning of year 1.
For accounting purposes, the asset is depreciated on a straight-line basis over an estimated useful life of 8 years, with zero residual value.
For taxation purposes the asset is depreciated 20% on cost per annum.
The tax rate is 30%.
Required:
What is the amount of the deferred tax liability relating to this depreciable asset at the end of years 1, 2 and 3? Students required to show the calculation in details.
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