Darlinghurst Ltd recorded an accounting profit before income tax of $75,000 for the year ended 30 June 2018 that included the following:

Government grant $18,000 Interest revenue 12,000 Depreciation of plant equipment 40,000 Annual leave expense 25,000 Statutory fine 15,000 Bad debts expense 14,000

Additional information:

No income tax deduction is allowed in relation to the statutory fine.

The government grant is not taxable.

Tax depreciation for the plant equipment for the year was $60,000.

Interest received in cash during the year was $6,000.

Cash payments of $20,000 for annual leave were made during the year.

Total bad debts written off during the year amounted to $5,000.

The company income tax rate is 30%.

Required

(a) Calculate the current tax of Darlinghurst Ltd for the year ended 30 June 2018 and prepare the required tax journal entry. (7 marks)

(b) Explain what the parts of the tax journal entry in part (a) above represent in relation to tax-effect accounting. (3 marks)