On 30 June 2012, an extract of Kendall Ltd’s statement of financial position, prepared for internal purposes but excluding the effect of income tax for the current year, disclosed the following information:
Deferred Tax Asset
$6727 (timing differences only)
Provision for Annual Leave
Deferred Tax Liability
The Machinery was acquired on 1 July 2010. Depreciation for accounting purposes was 8.5% (straight line), while 11% (straight line) was used for tax purposes.
The tax rate is 30%.
What is the value of the adjustment to the Deferred Tax Asset for 30 June 2012?
Do not net the Deferred Tax Asset account and the Deferred Tax liability Accounts.