Current and deferred tax with prior year losses    LO4, 5 The accounting profit before tax of Collingwood Ltd for the year ended 30 June 2020 was $175 900. It included the following revenue and expense items. Government grant (non‐taxable) $ 3 600 Interest revenue 11 000 Long service leave expense 7 000 Doubtful debts expense 4 200 Depreciation expense — plant (15% p.a., straight‐line) 33 000 Rent expense 22 800 Entertainment expense (non‐deductible) 3 900 The draft statement of financial position as at 30 June 2020 included the following assets and liabilities. 2020 2019 Cash $ 9 000 $ 7 500 Accounts receivable 83 000 76 800 Allowance for doubtful debts (5 000) (3 200) Inventories 67 100 58 300 Interest receivable 1 000 — Prepaid rent 2 800 2 400 Plant 220 000 220 000 Accumulated depreciation — plant (99 000) (66 000) Deferred tax asset ? 30 360 Accounts payable 71 200 73 600 Provision for long service leave 64 000 61 000 Deferred tax liability ? 720 Additional information • The tax depreciation rate for plant is 10% p.a., straight‐line. • The tax rate is 30%. • The company has $15 000 in tax losses carried forward from the previous year. A deferred tax asset was recognised for these losses. Taxation legislation allows such losses to be offset against future taxable profit. Required 1. Prepare the worksheets and journal entries to calculate and record the current tax liability and the movements in deferred tax accounts for the year ended 30 June 2020. 2. Justify your treatment of the interest revenue in the current tax worksheet. Explain how and why this leads to the deferred tax consequence shown in the deferred tax worksheet.