Current and deferred tax   LO4, 5 Kilcoy Ltd has determined its accounting profit before tax for the year ended 30 June 2020 to be $256 700. Included in this profit are the items of revenue and expense shown below. Royalty revenue (non‐taxable) $ 8 000 Entertainment expense 1 700 Depreciation expense — buildings 7 600 Depreciation expense — plant 22 500 Doubtful debts expense 4 100 Annual leave expense 46 000 Insurance expense 4 200 Development expense 15 000 The accounting profit for Kilcoy Ltd for the year ended 30 June 2020 also included a gain on sale of buildings of $5000. The company’s draft statement of financial position at 30 June 2020 showed the following assets and liabilities. Assets Cash $ 2 500 Accounts receivable $ 21 500 Less: Allowance for doubtful debts (4 100) 17 400 Inventories 31 600 Prepaid insurance 4 500 Land 75 000 Buildings 170 000 Less: Accumulated depreciation (59 500) 110 500 Plant 150 000 Less: Accumulated depreciation (67 500) 82 500 Deferred tax asset (opening balance) 9 600 333 600 Liabilities Accounts payable 25 000 Provision for annual leave 10 000 Deferred tax liability (opening balance) 6 000 Loan 140 000 $181 000 Additional information • Quarterly income tax instalments paid during the year were as follows. 28 October 2019 $18 000 28 January 2020 17 500 28 April 2020 18 000 The final balance of tax payable was due on 28 July 2020. • The tax depreciation rate for plant (which cost $150 000, 3 years before) is 20%. • Depreciation on buildings is not deductible for taxation purposes. The gain on sale of buildings of $5000 (see above) was recognised on buildings sold on 1 January 2020 that had cost $100 000 when acquired on 1 January 2014. The company depreciates buildings for accounting purposes at 5% p.a., straight-line. Any gain (loss) on sale of buildings is not taxable (not deductible). • During the year, the following cash amounts were paid. Annual leave $52 000 Insurance 3700 • Bad debts of $3500 were written off against the allowance for doubtful debts during the year. • The $15 000 spent (and expensed) on development during the year is not deductible for tax purposes until 30 June 2021. • Kilcoy Ltd has tax losses amounting to $12 500 carried forward from prior years. • The company tax rate is 30%. Required 1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2020. 2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts.