Helen Steyn Limited is a garment manufacturer; it commenced operations on 1 April 2016. The following is an extract from the companys draft balance sheet as at 31 March 2017 before adjusting the accounts for the current years tax expense. The company reports under Tier 1 of the New Zealand Framework.

Helen Steyn Limited Balance Sheet as at 31 March 2017
Assets		Liabilities
Cash	28,000	Accounts payable	20,000
Accounts receivable (net)	176,000	Provision for holiday pay	7,000
Inventory	89,000	Provision for long service leave	4,000
Term deposit	8,000	Bank term loan	250,000
Fixed asset (net of accumulated depreciation)	90,000		281,000
		Share capital and reserves	110,000
	$391,000		$391,000

Further information

• Helen Steyn Limiteds income statement for the year ended 31 March 2017 disclosed a net profit before tax of $100,000.
• On 1 April 2016, Helen Steyn Limited purchased its only fixed asset, a specialised machine which cost $120,000. For accounting purposes, this machine has an estimated useful life of four years and an expected salvage value of $nil. Helen Steyn Limited uses the straight-line method of depreciation. For tax purposes, depreciation is calculated on a straight-line basis over two years, assuming no residual value.
• At 31 March 2017, Helen Steyn Limited accrued an allowance for long service leave of $4,000. For tax purposes, long service leave is only deductible when the entity makes payment to its employees. As at balance date no long service leave had been paid.
• In the period to 31 March 2017, Helen Steyn Limited incurred entertainment expenses of $3,000. Although this is a legitimate business expense, only 50 per cent of this expense may be deducted for income tax purposes.
• On 31 March 2017, Helen Steyn Limited recorded a provision for holiday pay of $7,000. This relates to holidays accrued by employees before the end of the financial year, which they will not actually take until after the end of the financial year. For income tax purposes no deduction is permitted until the staff are actually paid for leave that they have taken.
• Helen Steyn Limiteds 31 March 2017 financial statements report accounts receivable of $176,000. This balance is net of an allowance for doubtful debts of $10,000. For tax purposes, no deduction is permitted for any provision for doubtful debts until the debt has actually been written off. No bad debts had been written off during the year.
• Included in net income for the year is an amount of non-taxable income amounting to $3,000.
• During the year, Helen Steyn Limited made provisional income tax payments totalling $20,000.
• The applicable tax rate is 30 per cent.

Required:

1. YOU DID THIS LAST WEEK: Calculate the taxable income and current tax expense for Helen Steyn Limited for the year ended 31 March 2017 and prepare appropriate journal entries. Show all your workings.

THIS WEEK:

2. Complete the worksheet provided to calculate the temporary differences arising from the above matters and the balance of the deferred tax asset and deferred tax liability as at 30 June 2018. Be sure to show all calculations clearly.
3. Provide the journal entry or entries to record the current tax expense and deferred income tax for the year ended 30 June 2018 in accordance with NZ IAS 12.
4. Prepare a reconciliation of the tax expense based on the reported profit with the tax expense after accounting for deferred tax.