A Ltd Sold an Item of Plant to Its Subsidiary

question 34

Multiple Choice

A Ltd sold an item of plant to its subsidiary, B Ltd, on 1 January 2017 for $25 000. The asset had cost A Ltd $30 000 and had an useful life of 6 years when acquired on 1 January 2015 from an external party. The adjustment necessary on consolidation to reflect the tax effect of the depreciation adjustment for the year ended 30 June 2017 will result in an increase in:

• A) deferred tax assets.
• B) deferred tax liabilities.
• C) income tax expense.
• D) current tax liability.

Reconcile discrepancies between bank statements and personal accounting records.

Compare the effects of different compounding intervals on the growth of investments.

Calculate the necessary monthly deposit to reach a retirement goal based on interest rates and compounding intervals.

Understand the different types of uncertainties in decision-making and their impacts.

---

Definitions:

Nominal Interest Rate

The interest rate before adjustments for inflation, as opposed to the real interest rate which is adjusted for inflation.

Equilibrium Interest Rate

The equilibrium interest rate is the rate at which the demand for funds equals the supply of funds in the financial markets, balancing savings and borrowing.

Total Output

The complete quantity of goods or services produced by an entity within a specific period.