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Hello Mike,
i was solving all the mini exercises for taxation and i dont have the same values as you at the Q3 & Q14Q3 i open the DT T account with b/f 19200 CR, i Dr RR and Cr DT with 1200 (RR 6000*0,20), the cr b/d is 800(4000*0,20), so it’s the c/d in the debit side and the figure balance 19200 dr DT and Cr CT
CT has cr b/d 11400 and the dr c/d is the same, it’s credit 19600 from DT and the figure balance 8200 goes to I/S.
you have the values 11400, 800 and 1200 in the solution. Where is my error?Q14 i open the DT T account with b/f 8000 cr, I dr RR 1100 (4400*0,25) cr DT 1100, the cr b/d is 6000 (24000*0,25), so it’s the c/d in the debit side and the missing figure 3100 dr DT cr CT.
CT has cr b/f 1050, cr b/d 3400 and the dr c/d is the same, it’s credit 3100 from DT and the missing figure 750 dr goes to I/S.
you have the values 1100, 2000 and 350 in the solution. Where is my error?Thanks in advance,
ADQ3 “the cr b/d is 800(4000*0,20), so it’s the c/d in the debit side and the figure balance 19200 dr DT and Cr CT” Here’s where you’ve gone wrong!
The question says that “the company’s taxable temporary differences increased by $10 million” so that 19,200 brought down liability in the deferred tax account needs to be increased to 21,200 to carry down from debit above the line to credit below the line
That, of course, now throws out your current tax T account workings
Q14 “cr b/d is 6000 (24000*0,25), so it’s the c/d in the debit side and the missing figure 3100 dr DT cr CT”
Here’s your error
The question says that “the tax base of the company’s net assets was $24 million less than their carrying amounts. This does not include the effect of the revaluation” so that carry down from debit above the line to credit below the line needs to be increased from 6,000 by 1,100 to 7,100
Again, that now throws out your current tax T account workings
OK?
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