Australian Tax Law - Income Taxes Quiz

Part (a) White Ltd recorded an accounting profit before income tax of $600,000 for the year ended 30 June 2021 that included the following items of revenue and expense: - No income tax deduction is allowed in relation to the impairment of goodwill expense. - Tax depreciation for the machinery for the year was $72,000 - Royalties received in cash during the year amounted to $48,000. - Cash payments of $30,000 for annual leave and $33,600 for rent were made during the year. - Total bad debts written off during the year amounted to $14,400. - The company income tax rate is 30%. Part (b) The following information was extracted from the accounting records of Brown Ltd as at 30 June 2021: - Machine: cost of $400,000. Accumulated depreciation for accounting is $100,000 whilst accumulated depreciation for tax is $140,000. Part (b) The following information was extracted from the accounting records of Brown Ltd as at 30 June 2021: - Machine: cost of $400,000. Accumulated depreciation for accounting is $100,000 whilst accumulated depreciation for tax is $140,000. - Goodwill of $50,000. Accumulated impairment losses of $40,000. - Plant Equipment: cost of $200,000. Accumulated depreciation for accounting is $90,000 whilst accumulated depreciation for tax is $75,000. - Provision for Annual Leave of $60,000. The company income tax rate is 30% Part A: Question One (a) Calculate the current tax for White Ltd for the year ended 30 June 2021 and prepare the required tax journal entry. (7 marks) Part A: Question One (a) Calculate the current tax for White Ltd for the year ended 30 June 2021 and prepare the required tax journal entry. (7 marks) Current Tax Worksheet Part A: Question One (b) Prepare the deferred tax worksheet for Brown Ltd for the year ending 30 June 2021. For each item you are only required to enter (1) carrying amount, (2) tax base, and (3) the amount of the taxable/deductible temporary difference. You are not required to calculate any changes in the deferred tax asset/liability accounts or prepare the journal entry. ( 3 marks) Deferred Tax Worksheet Part (a) White Ltd recorded an accounting profit before income tax of $600,000 for the year ended 30 June 2021 that included the following items of revenue and expense: - No income tax deduction is allowed in relation to the impairment of goodwill expense. - Tax depreciation for the machinery for the year was $72,000 - Royalties received in cash during the year amounted to $48,000. - Cash payments of $30,000 for annual leave and $33,600 for rent were made during the year. - Total bad debts written off during the year amounted to $14,400. - The company income tax rate is 30%. Part (b) The following information was extracted from the accounting records of Brown Ltd as at 30 June 2021: - Machine: cost of $400,000. Accumulated depreciation for accounting is $100,000 whilst accumulated depreciation for tax is $140,000. Part (b) The following information was extracted from the accounting records of Brown Ltd as at 30 June 2021: - Machine: cost of $400,000. Accumulated depreciation for accounting is $100,000 whilst accumulated depreciation for tax is $140,000. - Goodwill of $50,000. Accumulated impairment losses of $40,000. - Plant Equipment: cost of $200,000. Accumulated depreciation for accounting is $90,000 whilst accumulated depreciation for tax is $75,000. - Provision for Annual Leave of $60,000. The company income tax rate is 30% Part A: Question One (a) Calculate the current tax for White Ltd for the year ended 30 June 2021 and prepare the required tax journal entry. (7 marks) Part A: Question One (a) Calculate the current tax for White Ltd for the year ended 30 June 2021 and prepare the required tax journal entry. (7 marks) Current Tax Worksheet Part A: Question One (b) Prepare the deferred tax worksheet for Brown Ltd for the year ending 30 June 2021. For each item you are only required to enter (1) carrying amount, (2) tax base, and (3) the amount of the taxable/deductible temporary difference. You are not required to calculate any changes in the deferred tax asset/liability accounts or prepare the journal entry. ( 3 marks) Deferred Tax Worksheet