?At $30$ ?June $2023$ ?Maximum Ltd provided the following information from its balance sheet about its assets and liabilities

Assets $($$$000)$

Computers at cost $300$

Accumulated depreciation $(60)$

Accounts receivable $100$

Allowance for doubtful debts $(10)$

Liabilities

Provision for warranty costs $30$

Provision for employee benefits $($LSL$)20$

Maximum Ltd depreciates computers over five years in its accounting records but over three years for tax purposes. The straight$-$line method is used. No amounts were paid for long service leave or warranty claims during the year.

The following information is available for the following year, the year ending $30$ ?June $2024.$

Statement of profit or loss for Maximum Ltd for the year ending $30$ ?June $2024$ ? $$000$

Sales $4000$

Cost of goods sold $(1800)$

Depreciation expense $(60)$

Warranty expense $(90)$

Bad and doubtful debts expense $(25)$

Other expenses $(1375)$

Profit before tax $650$

During the year, Maximum Ltd wrote off bad debts amounting to $$15000.$ ?Warranty costs of $$70000$ ?were paid during the year. No amounts were paid for long service leave during the year. The following information is extracted from the statement of financial position at $30$ ?June $2024$:

Assets $$000$

Accounts receivable $120$

Allowance for doubtful debts $(20)$

Liabilities

Provision for warranty costs $50$

Provision for employee benefits $($LSL$)30$

There was no acquisition of plant and equipment during the year.

The tax rate as at $30$ ?June $2023$ ?and $30$ ?June $2024$ ?was $30$ ?per cent.

Required $$ ?Calculation Questions

$1.$ ?Calculate the amount of each of Maximum Ltd$$s temporary differences, if any, at $30$ ?June $2023,$ ?and state whether it is deductible or taxable. Present your answer using the following table format $($show workings where relevant$)$:

Account Carrying amount Tax base Temporary Difference

$2.$ ?What is the balance of the deferred tax liability and deferred tax asset as at $30$ ?June $2023?$

$3.$ ?Complete a worksheet showing the deferred tax balances for the year ended $30$ ?June $2024.$ ?Hint: the opening balances calculated for the previous year have to be deducted.

$4.$ ?Complete the relevant general journal entries to record current tax and deferred tax for the year ending $30$ ?June $2024.$

Written Questions $$ ?Independent of parts $1-4$ ?above.

$5.$ ?In your own words, explain the meaning of $$the tax base of an asset$/$liability$$ ?and how this differs from the asset$$s$/$liability$$s carrying amount.

$6.$ ?Calculate the carrying amount and the tax base of the following assets and liabilities at $30$ ?June $2024$ ?using the following table $($for each part, briefly explain, either showing your workings or providing a written explanation, how you determined the tax base$)$:

Account Carrying amount Taxable amount Deductible amount Tax base

i$.$ ?In July $2023,$ ?the company capitalised $$750000$ ?incurred in designing improved hearing aids. Expenditure on research and development is deductible in full for tax purposes when paid but amortised over five years for accounting purposes.

ii$.$ ?Borrowing costs associated with financing land held for resale have been capitalised. The borrowing costs paid in June $2024$ ?amounted to $$50000$ ?and will be expensed for accounting purposes when the land is sold.

iii. The closing balance of the Allowance for doubtful debts at $1$ ?July $2024$ ?was $$7500,$ ?after accruing a further $$4500$ ?and writing off $$6000$ ?as bad debts during the year ended $30$ ?June $2024.$ ?Accounts receivable at $30$ ?June $2023$ ?was $$213000$ ?and the balance at $30$ ?June $2024$ ?was $$250000.$ ?Prepare the Allowance for doubtful debts T account.

iv$.$ ?The opening balance of the prepaid insurance at $1$ ?July $2023$ ?is $$30000.$ ?The annual premium of $$144000$ ?was paid in March $2024,$ ?with $$138000$ ?expensed during the year ended $30$ ?June $2024.$ ?Prepare the Prepaid insurance T account.