Cost of the asset$100,000
Life of the asset 5 years
Depreciation rate20%
Capital cost allowance rate 50%
Residual value of the asset nil
Income tax rate 50%
-How is profit for the year calculated?
A) by deducting liabilities from assets
B) by deducting income tax expense from profit before taxes
C) by deducting cost of sales from sales revenue
D) by deducting assets from liabilities

Question

Cost of the asset$100,000 
Life of the asset 5 years 
Depreciation rate20% 
Capital cost allowance rate 50% 
Residual value of the asset nil 
Income tax rate 50%
-How is profit for the year calculated?
A) by deducting liabilities from assets
B) by deducting income tax expense from profit before taxes
C) by deducting cost of sales from sales revenue
D) by deducting assets from liabilities

Quizplus · Accepted Answer

Profit for the year is calculated by deducting income tax expense from profit before taxes.

Cost of the Asset$100,000