Bulldog Supplies Ltd has an item of equipment that has a carrying value of $80,000. For taxation purposes the asset's net value is $60,000 and deferred tax liabilities of $3,000 had previously been recorded. Bulldog also has accrued interest revenue of $5,000 that will not be taxed until it is received in cash. The tax rate is 30 per cent. What is the journal entry to record the tax effect?
E) None of the given answers.

Question

Quizplus · Accepted Answer

The Answer of Bulldog Supplies Ltd has an item of equipment that has a carrying value of $80,000. For taxation purposes the asset's net value is $60,000 and deferred tax liabilities of $3,000 had previously been recorded. Bulldog also has accrued interest revenue of $5,000 that will not be taxed until it is received in cash. The tax rate is 30 per cent. What is the journal entry to record the tax effect?
E) None of the given answers.

Bulldog Supplies Ltd Has an Item of Equipment That Has