Additional information:

Fierce Rewards Ltd depreciates plant over five years in its accounting records but over four years for tax purposes. The straight-line method is used.

No amounts were paid for employee benefits during the year.

There was no plant acquired during the year.

The tax rate as at 30 June 2017 and 30 June 2018 was 30%

Required:

(a) Calculate the amount of each of Fierce Rewards Ltds temporary differences at 30 June 2017, and state whether each is deductible or taxable. (4 marks)

(b) Calculate the balance of deferred tax liability and deferred tax asset at 30 June 20117. (2 marks)

(c) Calculate Fierce Rewards Ltds taxable income for the year ended 30 June 2018. (8 marks)

(d) Calculate the amount of each of Fierce Rewards Ltds temporary differences at 30 June 2018, and state whether each is deductible or taxable. (4 marks)

(e) Calculate the balance of deferred tax liability and deferred tax asset at 30 June 2018. (2 marks)

Question 2. Marks: 20 Suggested time allocation: 36 Minutes At 30 June 2017, Fierce Rewards Ltd had the following temporary differences: Asset or liability Carrying amount $ Tax base in $ Plant at cost 5,000 5,000 Accumulated depreciation (2,000) (2,500) Plant (net) 3,000 2,500 Accounts receivable s receivable 1,100 1,100 Allowance for doubtful debts (200) Accounts receivable (net) 900 1,100 Provision for warranty costs 3,000 Provision for employee benefits 2,000 The Statement of Comprehensive Income for Fierce Rewards Ltd for the year ending 30 June 2018 is as follows: Item Revenue Cost of goods sold Depreciation expense Warranty expense Bad and doubtful debts expense 8,000 (2,800) (1,000) (900) (50) Other expenses (1,250) 2,000 Profit before tax The following information was extracted from the Statement of Financial Position at 30 June 2018. Item $ Accounts receivable Allowance for doubtful debts Provision for warranty costs Provision for employee benefits 1,500 (150) 2,000 2,500