1.

An extract of the deferred tax worksheet for HM Ltd is shown below. All temporary differences relate to the profit or loss. The tax rate is 30%.

	Taxable temporary differences	Deductible temporary differences
Total at end of period	$140 000	$60 000
Total at beginning of period	50 000	20 000

	a.	DR. Income Tax Expense $15 000 DR. Deferred Tax Asset $12 000 CR. Deferred Tax Liability $27 000
	b.	DR. Income Tax Expense $9 000 DR. Deferred Tax Asset $6 000 CR. Deferred Tax Liability $15 000
	c.	DR. Income Tax Expense $15 000 CR. Deferred Tax Liability $15 000
	d.	DR. Income Tax Expense $24 000 DR. Deferred Tax Asset $18 000 CR. Deferred Tax Liability $42 000

2.

On 1 July 2017, PA Ltd purchased equipment for $140 000. Accounting depreciation is 10% straight line whereas tax depreciation is 20% straight line. The company tax rate is 30%. What is the journal entry to record the deferred tax on the plant for 30 June 2022?

	a.	DR. Income Tax Expense $4 200 CR. Deferred Tax Liability $4 200
	b.	DR. Deferred Tax Liability $4 200 CR. Income Tax Expense $4 200
	c.	DR. Deferred Tax Asset $14 000 CR. Income Tax Expense $14 000
	d.	DR. Deferred Tax Asset $4 200 CR. Income Tax Expense $4 200

3.

TI Ltd has the following tax balances at the end of its first financial period: current tax liability $12 000, deferred tax liability $15 000, and deferred tax asset $18 000. There is no tax on items of other comprehensive income. What recognise as income tax expense in its first financial period?

	a.	$15 000 [= $12 000 $15 000 + $18 000]
	b.	$30 000 [= $12 000 + $18 000]
	c.	$9000 [= $12 000 + $15 000 $18 000]
	d.	$27 000 [= $12 000 + $15 000]