1. Complete the following:

At 30 June 2019, before the inclusion of the current periods entries for taxation, Glasshouse Ltd recorded an accounting loss of $80 000, which included the following

Depreciation of equipment $ 50 000

Doubtful debts expense 10 000

Long-service leave expense 25 000

Insurance expense 21 000

Other information:

• Equipment was purchased on 1 July 2013 for $300 000. It is depreciated for accounting purposes over 6 years but for taxation purposes over 5 years. The equipment has no expected residual value.

• The yearly insurance premium of $36,000 was paid on 1 December 2018. At the end of the financial year the unused component of prepaid insurance amounted to $15 000.

• No payments have been made in relation to long service leave, although a bad debt of $2,000 was written off during the year.

• Deductions are available only when amounts are paid and not as they are accrued.

• The tax rate is 27.5%

  Required:

  Calculate taxable income (loss) and the related current tax liability for the current year. You must show all workings and present your calculation in an appropriate format (as shown in the lecture).