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(a) Accumulated depreciation of plant for tax purposes was $30 000 at 30 June 2019, and depreciation for tax purposes for the year ended 30
(a) Accumulated depreciation of plant for tax purposes was $30 000 at 30 June 2019, and depreciation for tax purposes for the year ended 30 June 2020 amounted to $ 7 000.
(b) The tax rate is 30%.
Question 1) Prepare a current tax worksheet and the journal entry to recognize the companys current tax liability as at 30 June 2020.
The profit before tax, as reported in the statement of profit or loss and other comprehensive income of Target Ltd for the year ended 30 June 2020, amounted to $85 000, including the following revenue and expense items: Rent revenue Bad debts expense Depreciation of plant Annual leave expense Long service leave expense Entertainment costs (non-deductible) Depreciation of buildings (non- deductible) Fines and penalties (non-deductible) $4 500 6 000 5 000 2 500 3 500 2 800 800 1 500 The statement of financial position of the company at 30 June 2020 showed the following net assets. 2020 2019 Assets Cash Inventories Receivables Allowance for doubtful debts Office supplies Plant Accumulated depreciation Buildings Accumulated depreciation Goodwill (net) Deferred tax asset Liabilities Accounts payable Provision for long service leave Provision for annual leave Rent received in advance Deferred tax liability 8 000 17 000 50 000 (7000) 2 500 50 000 (26 000) 30 000 (14 800) 7 000 8 500 15 500 48 000 (4 000) 2 200 50 000 (21 000) 30 000 (14000) 7 000 4050 ? 29 000 6 000 3 800 4 500 ? 26 000 4 500 3 000 2 000 3 150
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