Accounting for income tax The accounting profit before tax for the year ended 30 June 2017 for Aldee Ltd amounted to $235.000. It included the following income and expense items: Royalties (exempt income) Interest revenue Annual leave expense Doubtful debts expense Depreciation - plant (15% per year, straight-line) Depreciation - motor vehicles (20% per year, straight-line) Insurance expense Rent expense Warranty expense Entertainment expense (not tax deductible) 15,000 CR 16,000 CR 9.000 DR 3,800 DR 47.250 DR 20.000 DR 14,000 DR 42,000 DR 5,600 DR 4.000 DR The draft statement of financial position at 30 June 2017 contained the following assets and liabilities: Assets Cash Trade receivables Less Allowance for doubtful debts Inventory Interest receivable Prepaid insurance Plant -cost Less Accumulated depreciation Motor vehicles - cost Less Accumulated depreciation Deferred tax asset 46.000 88,000 (4.000) 57.100 2.000 4.000 315.000 (113,250) 100,000 (70.000) 22,500 45,800 (2 200) 54.300 1.000 1,000 315,000 (66,000) 100,000 (50.000) 17.190 Liabilities: Trade payables Provision for annual leave Provision for warranties Bank loan Deferred tax liability 66,200 15,600 14.200 130.000 43,600 11.000 11.600 150,000 7.200 Accounting for income tax The accounting profit before tax for the year ended 30 June 2017 for Aldee Ltd amounted to $235.000. It included the following income and expense items: Royalties (exempt income) Interest revenue Annual leave expense Doubtful debts expense Depreciation - plant (15% per year, straight-line) Depreciation - motor vehicles (20% per year, straight-line) Insurance expense Rent expense Warranty expense Entertainment expense (not tax deductible) 15,000 CR 16,000 CR 9.000 DR 3,800 DR 47.250 DR 20.000 DR 14,000 DR 42,000 DR 5,600 DR 4.000 DR The draft statement of financial position at 30 June 2017 contained the following assets and liabilities: Assets Cash Trade receivables Less Allowance for doubtful debts Inventory Interest receivable Prepaid insurance Plant -cost Less Accumulated depreciation Motor vehicles - cost Less Accumulated depreciation Deferred tax asset 46.000 88,000 (4.000) 57.100 2.000 4.000 315.000 (113,250) 100,000 (70.000) 22,500 45,800 (2 200) 54.300 1.000 1,000 315,000 (66,000) 100,000 (50.000) 17.190 Liabilities: Trade payables Provision for annual leave Provision for warranties Bank loan Deferred tax liability 66,200 15,600 14.200 130.000 43,600 11.000 11.600 150,000 7.200