The Following Information Relates to Godfrey Limited for the Year

question 25

Multiple Choice

The following information relates to Godfrey Limited for the year ended 30 June 2014.
Accounting profit before income tax (after all expenses have been included) $300 000
Fines and penalties (not tax deductible) 20 000
Depreciation of plant (accounting) 40 000
Depreciation of plant (tax) 100 000
Long-service leave expense (not a tax deduction until the leave is paid) 8 000
Income tax rate 30%
On the basis of this information the current tax liability is:

• A) $74 400
• B) $78 000
• C) $80 400
• D) $99 600.

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Definitions:

Negative Message

Communication that conveys rejection, refusal, or other unwelcome news.

Direct Format

A straightforward and clear way of presenting information, without unnecessary decorations or diversions.

Assumptions

Beliefs or ideas taken for granted without proof, often forming the basis for decision-making and reasoning.

Neutral Buffer

An unbiased or impartial intermediary area or substance that mitigates the effects of extremes or facilitates the resolution of conflicts.