What is the income tax payable under the deferral method for F2015? $$\begin{array} { | l | r | r | r | }
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Income before tax } & 120,000 & 110,000 & 150,000 \
\hline \text { Taxable income } & 85,000 & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 25 \% & 35 \% \
\hline
\end{array}$$

Question

What is the income tax payable under the deferral method for F2015? $$\begin{array} { | l | r | r | r | } 
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Income before tax } & 120,000 & 110,000 & 150,000 \
\hline \text { Taxable income } & 85,000 & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 25 \% & 35 \% \
\hline
\end{array}$$

Quizplus · Accepted Answer

To calculate income tax payable under the deferral method for F2015, we need to find the taxable income first. 
Taxable income = Revenue - Expenses - Capital Cost Allowance (CCA)

Given that the revenue is $200,000 and the expenses are $90,000, 
Taxable income = $200,000 - $90,000 = $110,000

Next, we need to calculate the CCA:
CCA = Capital Cost * CCA rate

Given that the capital cost is $400,000 and the CCA rate is 30%, 
CCA = $400,000 * 30% = $120,000

Now, we can calculate the taxable income after CCA:
Taxable income after CCA = Taxable income - CCA 
Taxable income after CCA = $110,000 - $120,000 = -$10,000

Since the taxable income after CCA is negative, there is no tax payable for F2015. The tax liability can be deferred to the next taxation year.

The correct answer is therefore C) $36,750, which is none of the above.

What Is the Income Tax Payable Under the Deferral Method