Dandenong Ltd commences operations on 1 July 2018. One year later, on 30 June 2019, Dandenong Ltd prepares its first statement of comprehensive income and its first statement of financial position. The statements are prepared before considering taxation. The following information is available.

• All wages and salaries have been paid as at year end and are deductible for tax purposes.
• None of the long service leave expense has actually been paid. It is not deductible for tax purposes until it is actually paid.
• The revenue received in advance is included in the taxable income.
• Insurance was initially prepaid to the amount of $100,000. At the year end the unused component of the prepaid insurance amounted $50,000. Actual amounts paid are allowed as a tax deduction.
• Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. No bad debts were written off.
• The plant is depreciated on a straight-line basis over 5 years for accounting purposes, but over 3 years for taxation purposes. The plant is not expected to have any residual value.
• The company tax rate is assumed to be 30%.

1. Calculate Dandenong Ltds taxable income for the year ended 30 June 2019.

2. Complete the Deferred Tax Worksheet provided on page 5 in accordance with AASB 112: Income Taxes.

3. Prepare the applicable journal entries to record the tax adjustments as at 30 June 2019.

Statement of comprehensive income for the year ended 30 June 2019 Sales revenue $1,200,000 Cost of goods sold 700,000 Gross profit 500,000 Wages and salaries expense (200,000) Doubtful debt expense (20,000) Insurance expense (50,000) Long service leave expense (50,000) Lepreciation expense - Plant (30,000 Accounting profit before tax 150,000 Assets and Liabilities extracted from Statement of Financial Position as at 30 June 2019 Assets Cash $150.000 Accounts receivables (net) 180,000 Inventories 200,000 Prepaid insurance 100,000 Plant 150,000 Accumulated depreciation - Plant (30,000) Total Assets 700,000 Liabilities Accounts payable 100,000 Revenue received in advance 50,000 Loan payable 200,000 Provision for long service leave 50.000 Total Labilities 400.000 Net Assets 300.000 Statement of comprehensive income for the year ended 30 June 2019 Sales revenue $1,200,000 Cost of goods sold 700,000 Gross profit 500,000 Wages and salaries expense (200,000) Doubtful debt expense (20,000) Insurance expense (50,000) Long service leave expense (50,000) Lepreciation expense - Plant (30,000 Accounting profit before tax 150,000 Assets and Liabilities extracted from Statement of Financial Position as at 30 June 2019 Assets Cash $150.000 Accounts receivables (net) 180,000 Inventories 200,000 Prepaid insurance 100,000 Plant 150,000 Accumulated depreciation - Plant (30,000) Total Assets 700,000 Liabilities Accounts payable 100,000 Revenue received in advance 50,000 Loan payable 200,000 Provision for long service leave 50.000 Total Labilities 400.000 Net Assets 300.000