Krypto Ltd had an accounting profit before tax for the year ended 30 June 2021 of $5,000. Included in the accounting profit were the following items of income and expense: royalty revenue $18,000, bad debts expense $14,000 and insurance expense $27,000.

Krypto Ltd calculated the following: bad debts written off $18,000 and insurance paid $34,000. The company tax rate is 30%.

For the year ended 30 June 2021, the current tax journal entry is:

Select one:

a.

DR Income tax expense (current) 1,800 CR Current tax liability 1,800

b.

DR Deferred tax asset 7,200 CR Income tax expense (current) 7,200

c.

DR Deferred tax asset 1,800 CR Income tax expense (current) 1,800

d.

DR Income tax expense (current) 7,200 CR Current tax liability 7,200

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