Page 41 - F1 Integrated Workbook STUDENT 2018

Corporrate Incoome Tax and Cappital Tax Computations

Exxampple 1

In yyear endingg 31/12/20X1 an entity Zippy mmade an acccounting pprofit of
$500,000. Proffit included $3,500 of f entertaininng expenses which aare
disaallowable ffor tax purpposes and $5,000 of income exxempt fromm taxation.

Zipppy has $700,000 of noon-current assets which were acquired onn 01/01/20XX0
andd are depreeciated at 110% on coost. Tax depreciation rates are 220% reduccing
balaance.

Calculate thee accountiing deprecciation forr the year ended 31//12/X1.

Solution

Thee accountinng depreciaation is $700,000 × 100% = $7,0000

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