KB Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected...
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Accounting
KB Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected to have a useful life of 4 years (straight-line basis) and no residual value. The ATO allows the company to depreciate the asset over 5 years for taxation purposes. The profit before tax for the company for the year ending 30 June 2015 is $500,000. The tax rate is 30%.
Determine the deferred tax liability or deferred tax asset that will result.
Prepare the necessary journal entries on 30 June 2015.
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