Included in the accounting profit before tax for Surf Ltd for the period ended 30 June 2023 were the following accounting income and expense items:

• Government grant income (150,000)
• Doubtful debt expenses 830,000
• Consumable stores expense 205,000
• Council rates expenses 8,000
• Accounting depreciation 230,000
• Annual leave expenses 1,700,000
• Warranty claim expenses 2,500,000

An extract of the current and prior period balance sheet accounts relevant for tax effect accounting purposes are as follows:

	30 June 2023	30 June 2022
Assets
Accounts receivable	5,500,000	4,875,000
Allowance for doubtful debts	(440,000)	(390,000)
Consumable stores	150,000	155,000
Prepaid council rates	12,000	10,000
PPE	2,300,000	2,300,000
Accum depn - PPE	(460,000)	(230,000)
Deferred tax asset	?	504,000
Liabilities
Income tax payable	?	0
Warranty provision	(3,150,000)	(850,000)
Provision for annual leave	(550,000)	(440,000)
Deferred tax liability	?	(118,500)

Additional Information:

• The government grant income is not assessable for income tax purposes.
• Doubtful debt expenses are accrued at year end for accounting. Tax deductions are only available when debts are written off. Debts written off for the year were $780,000.
• Annual leave expenses are accrued for accounting purposes. Tax deductions are only available when leave is taken. There was $1,590,000 in leave taken during the year.
• Annual Council rates paid are recorded as a prepayment for accounting purposes and then expensed over the 12-month period.Tax deductions are available when paid. Rates paid during the year were $10,000.
• For accounting, Consumable stores purchased are first capitalised and only expensed when they are used by the business. For tax, the stores are deducted when purchased. During the year, $200,000 of consumable stores were purchased.
• The written down value of Plant and equipment (PPE) at the end of the year for tax purposes was $1,380,000 and tax depreciation was $460,000 for the year.
• The tax rate is 30%.

Required:

1. Calculate the taxable profit and current tax liability for the year. Prepare the current tax liability journal.
2. In a worksheet calculate the temporary differences from the information given above.
3. Prepare the journal entries for the deferred tax asset and deferred tax liability for the year.