Calculation of current and deferred tax, and adjustment entry   LO4, 5 The profit before tax, as reported in the statement of profit and loss for Adeline Ltd for the year ended 30 June 2021, amounted to $100 000, including the following revenue and expense items. Sales revenue $650 000 Interest revenue 50 000 Government grant (non‐taxable) 50 000 Cost of goods sold 400 000 Bad debts expense 10 000 Depreciation expense — equipment 10 000 Depreciation expense — plant 20 000 Research and development expense 80 000 Wages expense 120 000 Long service leave expense 20 000 The statement of profit and loss for Adeline Ltd for the year ended 30 June 2021 also included a gain on sale of equipment of $10 000. According to AASB 116/IAS 16, this gain is not classified as revenue, but it is nevertheless part of the accounting profit before tax for the year. The draft statements of financial position of Adeline Ltd at 30 June 2020 and 30 June 2021 showed the following assets and liabilities. Assets Cash $ 30 000 $ 30 000 Inventories 100 000 150 000 Accounts receivables 50 000 70 000 Allowance for doubtful debts (5 000) (10 000) Interest receivable 25 000 20 000 Equipment 30 000 — Accumulated depreciation — equipment (15 000) — Plant 200 000 200 000 Accumulated depreciation — plant (40 000) (60 000) Goodwill 15 000 15 000 Deferred tax asset 33 000 ? Liabilities Accounts payable 60 000 40 000 Wages payable 50 000 80 000 Revenue received in advance — 20 000 Loan payable 200 000 100 000 Provision for long service leave 40 000 30 000 Deferred tax liability 24 000 ? Additional information • In the year ended 30 June 2020, Adeline Ltd had a tax loss of $65 000 that it carried over in the deferred tax asset. In June 2021, the company received an amended assessment for the year ended 30 June 2020 from the ATO, indicating that an amount of $5000 claimed as a deduction has been disallowed. Adeline Ltd has not yet adjusted its accounts to reflect the amendment. • Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. All other general taxation rules apply. • The movement in the equipment account is caused by the sale of the equipment on 1 March 2021 for which a gain on sale of $10 000 was recognised as part of the profit before tax (see above). Adeline Ltd had purchased the equipment on 1 July 2019 (with an estimated useful life of 2 years and no residual value) and for taxation purposes it claimed its full cost as a deduction at 30 June 2020. • The plant is depreciated on a straight‐line basis over 10 years for accounting purposes, but over 5 years for taxation purposes. The plant is not expected to have any residual value. • All research and development expenses were paid in cash during the year ended 30 June 2021. • The company tax rate is assumed to be 30% for the year ended 30 June 2020 and 28% for the year ended 30 June 2021. The balances of the deferred tax accounts at 30 June 2020 are still reflecting the 30% tax rate. Required 1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021. 2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.