4.Skylar Ltd commenced operations on 1 July 2016. It disclosed a net profit before tax of $90,000 for the year ended 30 June 2017.

This profit was determined after charging the following items:

Impairment loss- goodwill$4,000

Depreciation of Plant & Equipment$15,000

Depreciation of motor vehicles$5,000

Doubtful Debts$5,000

Increase in Provision for Employee Entitlements$12,000

On 30 June 2017, the accounting and taxation records disclosed the following:

Carrying Amount

Tax Base

ASSETS

Plant & Equipment

Accumulated Dep'n:

Motor Vehicles

Accumulated Dep'n:

Cash

Accounts-Receivable (Net)

LIABILITIES

Accounts-Payable

Prov'n for Employee Entitlements

NET ASSETS

60,000

-15,000

30,000

-5,000

45,000

25,000

20,000

85,000

175,000

50,000

42,000

92,000

83,000

60,000

-20,000

30,000

-7,500

40,000

22,500

20,000

90,000

172,500

50,000

30,000

80,000

92,500

Additional information:

The plant and equipment, which cost 60,000 was purchased on 1 July 2016 and is being depreciated at 25% for accounting purposes and at 33-1/3% for tax purpose.

The doubtful debts are not allowed for tax purposes.

There were no employee entitlements taken during the 2017 financial year.

The motor vehicle, which was purchased on 1 July 2017 and cost $30,000 is depreciated over 6 years for accounting purposes and over 4 years for tax purposes. Assume straight line depreciation with NIL salvage value.

Impairment loss for goodwill is not allowable as a tax deduction.

Required tasks (Use Excel spreadsheet to display your answer):

(a)Prepare statement of taxable income for the year ended 30 June 2017.

(b)Calculate Deductible temporary differences

(c)Calculate Taxable temporary differences

(d)Prepare journal entries for income tax expense in accordance with AASB112. (The rate of company tax is 30%)

the year ended 30 June 201?. This prot was determined after charging the following items: Skylar Ltd commenced operations on 1 July 2016. It disclosed a net prot before tax of $90,000 for Impairment loss goodwill $4,000 Depreciation of Plant & Equipment $15,000 Depreciation of motor vehicles $5,000 Doubtful Debts $5,000 Increase in Provision for Employee Entitlements $12,000 On 30 June 201.7, the accounting and taxation records disclosed the following: Carrying Amount Tax Base AS SETS Plant 8: Equipment 60,000 60,000 Accumulated 15,000 20 000 110010: 45,000 40,000 30,000 30,000 MDlD-f Vehicles _5 000 Jr 500 Accumulated 25 um} 22 500 110010: 20,000 20,000 C65\" 85 000 90 000 Accounts 1 15,000 1 ?2,500 \fFNSACC1 4_AT1_PE_TQl-.-1_v1 .docx Additional information: a The plant and equipment, which cost 60,000 was purchased on 1 July 2016 and is being depreciated at 25% for accounting purposes and at 33-18% for tax purpose. - The doubtful debts are not allowed for tax purposes. - There were no employee entitlements taken during the 201? nancial year. a The motor vehicle, which was purchased on 1 July 201? and cost $30 000 is depreciated over 6 years for accounting purposes and over 4 years for tax purposes. Assume straight line depreciation with NIL salvage value. - Impairment loss for goodwill is not allowable as a tax deduction. Required tasks (Use Excel spreadsheet to display your answer): (a) Prepare a statement oftaxable income for the year ended 30 June 201?. (b) Calculate Deductible temporary differences (c) Calculate Taxable temporary differences (d) Prepare journal entries for income tax expense in accordance with AASB112. (The rate of company tax is 30%)