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At 30 June 200S, E-Surfboards Ltd had the following temporary differences: Carrying amount ($000) 300 (60) 240 100 Tax base Temporary Asset or liability Computers
At 30 June 200S, E-Surfboards Ltd had the following temporary differences: Carrying amount ($000) 300 (60) 240 100 Tax base Temporary Asset or liability Computers at cost Computers (net) Accounts receivable Allowance for doubtful debts Accounts receivable (net) Provision for warranty costs Provision for employee benefits (LSL) 300 (100) 200 100 0 100 90 The following information is available for the following year, the year ending 30 June 2006 Income statement for E-Surfboards Ltd for the year ended 30 June 2006 $000 4 000 (1 800) (6C) Cost of goods sold expense Depreciation expense Warranty expense Bad and doubtful debts expense Other expenses Profit before tax (25) (1 375) 650 E-Surfboards Ltd depreciates computers over five years in its accounting records but over three years for purposes. The straight-line method is used. During the year E-Surfboards wrote off bad debts amounting 1 000. Warranty costs of $70 000 were paid during the year. No amounts were paid for long leave during the year. The following information is extracted from the balance sheet at 30 June 2006: Accounts receivable Allowance for doubtful debts 120 (20) Provision for warranty costs Provision for employee benefits (LSL) There was no acquisition of plant and equipment during the year The tax rate as at 30 June 2005 and 30 June 2006 was 30 per cent. (a) Calculate the amount of each of E-Surfboards' temporary differences, if any, at 30 June 2005 state whether it is deductible or taxable b) What is the balance of the deferred tax liability and deferred tax asset, if any, as at 30 June (c) Calculate E-Surfboards' taxable income for the year ended 30 June 2006. (d) Prepare journal entries to record current tax and deferred tax for the year ended 30 June
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