Assets and liabilities as shown in the statement of financial position

As at 30 June 2020

Assets
Cash	30,000
Inventories	40,000
Accounts receivable	40,000
Provision for doubtful debt	(4,000)
Prepaid rent	10,000
Machinery	30,000
Accumulated depreciation - machinery	(6,000)
Liabilities
Accounts payable	20,000
Revenue received in advance	10,000
Loan payable	40,000
Provision for long service leave	10,000

Additional information

• The company tax rate was assumed to be 30%.
• All wages had been paid as at year end and were deductible for tax purposes.
• Rent was paid in advance on 1 July 2019. Actual amounts paid were allowed as a tax deduction.
• No bad debts were written off.
• None of the long service leave expenses has actually been paid. It is not deductible for tax until it is actually paid.
• The revenue received in advance is taxable income.
• The machinery was depreciated on a straight-line basis over 5 years for accounting purposes, but over 3 years for taxation purposes. The machinery was not expected to have any residual value.

Required:

1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2020.

(8 marks)

2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts at 30 June 2020

(9 marks)