0ther information:

• The tax rate is 30 per cent.
• Dandenong Ltd has some land which cost $840,000 and which has been revalued to its fair value of $1,260,000.
• Insurance was initially prepaid to the amount of $110,000. At the year-end, the unused component of the prepaid insurance amounted to $20,000. Actual amounts paid are allowed as a tax deduction.
• The machinery is depreciated over 5 years for accounting purposes, but over 4 years for taxation purposes.
• Amounts received from sales, including those on credit terms, are taxed at the time of the sale is made.
• Warranty expenses were accrued $85,000 and, at the year-end, actual payments of $25,000 had been made (leaving of accrued balance of $60,000). Deductions for tax purposes are only available when the amounts are paid and not as they accrued.
• All administration and salaries expenses incurred have been paid as at year-end.
• The amount of $84,000 long service leave expense has been paid.

1. Prepare the applicable Journal Entries at 30 June 2020 to account for tax using the Balance Sheet Method.

Dandenong Ltd commences operations on 1 July 2019. One year after the commencement of its operations (30 June 2020) the entity presents its first Statement of Comprehensive Income and Statement of Financial Position on 30 June 2020. The statements are prepared before considering taxation. The following information is available. Dandenong Ltd Statement of Comprehensive Income for the year ended 30 June 2020 Gross Profit 2,800,000 Expenses Administrative expenses Salaries Provision for doubtful debts Long service leave Warranty expenses Depreciation expense on machinery Insurance 294,000 414,000 70,000 140,000 85,000 224,000 90.000 1.317,000 1,483,000 Accounting profit for the year Dandenong Ltd An Extract of Assets and Liabilities as disclosed in the Statement of Financial Position for the year ended 30 June 2020 $ $ Assets Cash 64,000 Inventory 280,000 Receivables (net) 210,000 Prepaid insurance 20,000 Machinery - cost 1,120,000 Less accumulated depreciation 224,000 896,000 Land 1,260,000 Total assets 2,730,000 Liabilities Payables Provision for warranty expenses Loan payable Provision for long service leave Total liabilities Net assets 220,000 60,000 560,000 56,000 896,000 1,834,000