(a) Assume for the year ended 31 March 2020, Kindness Limited reports an accounting profit before tax of $1,000,000. This amount includes the following revenue and expense items in the Income Statement: Accrued income Insurance expense Depreciation expense You have also been provided the following information: Accrued income: The amount of accrued income earned for the reporting period 31 March 2020 was $100,000. Accrued income is not taxable until cash is received. Insurance expense: On 1 April 2019 the balance of prepaid insurance was $50,000. During the year, $150,000 was paid for insurance. As at 31 March 2020, the balance of prepaid insurance was $80,000. Insurance expense is tax deductible when it is paid. Depreciation expense: Specialised machinery was acquired on 1 April 2017 at a cost of $400,000. The machinery has an economic life of 10 years with no residual value. For tax purposes, the machinery has an economic life of 5 years with no residual value. The straight- line method of depreciation is used to depreciate the machinery for both accounting and tax purposes. Tax rate is 28%. . . Required: In accordance with NZ IAS 12, calculate the taxable profit and prepare journal entries to recognise the current tax payable for the year ended 31 March 2020. Show all workings. (5 marks) (b) Sunny Limited purchased equipment on 1 April 2018 for $500,000. For accounting purposes, the equipment is depreciated over 8 years on a straight line basis with no residual value. For tax purposes, the cost of the equipment is depreciated over 6 years using the straight line method. At the end of the financial year 31 March 2020, the equipment was revalued to $750,000. Sunny Limited intends to sell the equipment very soon. Any capital gain from sale is not subject to taxation in New Zealand. Assume the tax rate is 28 percent. Required: In accordance with NZ IAS 12, provide the journal entries for the deferred tax adjustment arising from the equipment for the 2020 financial year. Show all workings