At 30^th June 2018, LMS Ltd had the following balances.

Asset or Liability

Carrying Amount($000)

Computer at Cost

300

Accumulated Depreciation

(60)

Computers net

240

Accounts Receivable

100

Allowance for doubtful debts

(10)

Accounts Receivable (net)

90

Provision for Warranty Costs

30

Provision for Long Service Leave

20

Statement of profit or loss and other comprehensive income for LMS Ltd for the year ending 30 June 2019$000

Revenue

4000

COGS

(1800)

Depreciation Expenses

(60)

Warranty Expenses

(90)

Bad and doubtful debts

(25)

Other Expenses

(1375)

Profit before Tax

650

Other Comprehensive Income

Nil

LMSLtd depreciates computers over five years in its accounting records but over three years for tax purposes. The straight-line method is used. During the year, LMS wrote off bad debts amounting to $15 000. Warranty costs of $70 000 were paid during the year. No amounts were paid for long-service leave during the year. The following information is extractedfrom the statement of financial position at 30 June 2019:

Assets

Accounts Receivable

120

Allowance for Doubtful Debt

(20)

Liabilities

Provision for warranty Costs

50

Provision for Long Service Leave

30

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

The tax rate as at 30 June 2018 and 30 June 2019 was 30 per cent.

Required:

1.Calculate LMS Ltd' taxable income for the year ending 30 June 2019. (2 Marks)

2.Prepare journal entries to record current tax and deferred tax for the year ending 30 June 2019.