David Ltd commences operations on 1 July 2018

On the same date, it purchases a machine at a cost of $1000 000

The machine is expected to have a useful life of five years, with benefits being uniform throughout its life. It will have no residual value at the end of five years

Hence, for accounting purposes the depreciation expense would be $200 000 per year

For taxation purposes, the ATO allows the company to depreciate the asset over four yearsthat is, $250 000 per year

The profit before tax of the company for each of the next five years (years ending 30 June) is $600 000, $700 000, $800 000, 900 000 and $10 00 000 respectively

The tax rate is 30 per cent

Required:

a) Calculate taxable profit on 30 June 2020.

b) Record the necessary journal entries on 30 June 2020.