ABC Limited Has an Asset with a Carrying Value of €50

question 5

Multiple Choice

ABC Limited has an asset with a carrying value of €50 000. The tax base of this asset is €40 000. The tax rate is 30%. As a result, which of the following deferred tax items does Roland Limited have?

• A) A deferred tax asset of €10 000;
• B) A deferred tax liability of €3000;
• C) A deferred tax liability of €10 000;
• D) A deferred tax asset of €3000.

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Definitions:

Earnings Per Share

A financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Liquidating Dividend

A type of dividend paid by a company that is returning part of the original investment back to shareholders, typically during dissolution.

Paid-in Capital

The amount of money that a company receives from issuing shares of stock, recorded in the shareholders' equity section of the balance sheet.

Scrip Dividend

A method of paying dividends in the form of additional shares instead of cash.