Exercise 6.2 ★ CALCULATION OF CURRENT TAX Thistle Ltd made an accounting profi t before tax of £40 000 for the year ended 30 June 2014. Included in the accounting profi t were the following items of revenue and expense. Donations to political parties (non-deductible) Depreciation — machinery (20%) Annual leave expense Rent revenue 5 000 15 000 5 600 12 000 For tax purposes the following applied: Depreciation rate for machinery Annual leave paid Rent received Income tax rate 25% 6 500 10 000 30% Required 1. Calculate the current tax liability for the year ended 30 June 2014, and prepare the adjusting journal entry. 2. Explain your treatment of rent items in your answer to requirement 1.