Blue Sky Inc. (BSI)is a public company that is required to file interim statements on a quarterly basis. BSI has a loss carryforward available of $150,000, which has not been recognized as a deferred tax asset. In the first interim period, the company earns $80,000, and it is expected that it will earn the following amounts in each of the next three quarters: $50,000 in quarter two, $170,000 in quarter three, and $200,000 in quarter four. The company pays a tax rate of 30%, excluding any loss carryforwards.
Required:
Calculate the tax expense for each interim period assuming that the company follows the requirements of IAS 34.

Question

Quizplus · Accepted Answer

The Answer of Blue Sky Inc. (BSI)is a public company that is required to file interim statements on a quarterly basis. BSI has a loss carryforward available of $150,000, which has not been recognized as a deferred tax asset. In the first interim period, the company earns $80,000, and it is expected that it will earn the following amounts in each of the next three quarters: $50,000 in quarter two, $170,000 in quarter three, and $200,000 in quarter four. The company pays a tax rate of 30%, excluding any loss carryforwards.
Required:
Calculate the tax expense for each interim period assuming that the company follows the requirements of IAS 34.