Other information:
For tax purposes, depreciation on machinery is $14,000 and for vehicles $300, for the year ended 30 June 2019.
Doubtful debts, annual leave and service warranties are expensed in the year ending 30 June 2019 but are not tax deductible for tax purposes until paid.
Zeus Ltd has accrued annual leave entitlements of $1,800 in calculating net profit for the year ended 30 June 2019.
Service warranty expense is only deductible as a tax deduction when claimed by customers.
The company accrues doubtful debts expense as soon as it appears on a customers account as uncollectible. However, the bad debt is not allowable as a tax deduction until all avenues to collect the account have been exhausted.
The tax rate is 30% and taxable income is $79,500.
Requirements:
- Complete a deferred tax worksheet (5 marks).
- Complete the entry to account for taxes (2 mark)
- Complete a statement of comprehensive income showing as much detail as possible (3 marks).
Assignment Facts 1 Zeus Ltd was established on 1 July 2018 with share capital totalling $132.000. One year later the statement of comprehensive income and statement of financial position were as follows: Statement of comprehensive income for the year ended 30 June 2019 $ Sales revenue Interest revenue Dividend revenue Exempt income Capital profit on sale of land 650,000 500 300 400 700 651,900 Cost of sales Depreciation on machinery Depreciation on vehicles Goodwill impairment loss Salaries and wages Annual leave Rent of premises Insurance Entertainment Fines and penalties Fringe benefits tax Warranty expense Doubtful debts expense Other expenses Profit before income tax 175,000 5,900 100 300 120,000 1,800 72,000 1,200 400 100 200 600 200 194,100 571,900 80,000 Statement of Financial Position as at 30 June 2019 24,000 37,500 (200) 37,300 100 20,000 300 Assets Cash Accounts receivable Less: Allowance for doubtful debts Interest receivable Inventory Prepaid insurance Machinery (cost) Less: Accumulated depreciation Vehides Less: Accumulated depreciation Goodwill Less: Accumulated impairment loss Investments Total assets 73,100 79,000 (5,900) 11,000 (100) 45,000 (300) 10,900 44,700 25,000 235,400 Liabilities Accounts payable Rent payable Provision for annual leave Provision for services warranties Total liabilities Net Assets 15,000 6,000 1,800 600 23,400 212,000 Shareholders'equity Share capital Retained earnings 132,000 80,000 212,000 Assignment Facts 1 Zeus Ltd was established on 1 July 2018 with share capital totalling $132.000. One year later the statement of comprehensive income and statement of financial position were as follows: Statement of comprehensive income for the year ended 30 June 2019 $ Sales revenue Interest revenue Dividend revenue Exempt income Capital profit on sale of land 650,000 500 300 400 700 651,900 Cost of sales Depreciation on machinery Depreciation on vehicles Goodwill impairment loss Salaries and wages Annual leave Rent of premises Insurance Entertainment Fines and penalties Fringe benefits tax Warranty expense Doubtful debts expense Other expenses Profit before income tax 175,000 5,900 100 300 120,000 1,800 72,000 1,200 400 100 200 600 200 194,100 571,900 80,000 Statement of Financial Position as at 30 June 2019 24,000 37,500 (200) 37,300 100 20,000 300 Assets Cash Accounts receivable Less: Allowance for doubtful debts Interest receivable Inventory Prepaid insurance Machinery (cost) Less: Accumulated depreciation Vehides Less: Accumulated depreciation Goodwill Less: Accumulated impairment loss Investments Total assets 73,100 79,000 (5,900) 11,000 (100) 45,000 (300) 10,900 44,700 25,000 235,400 Liabilities Accounts payable Rent payable Provision for annual leave Provision for services warranties Total liabilities Net Assets 15,000 6,000 1,800 600 23,400 212,000 Shareholders'equity Share capital Retained earnings 132,000 80,000 212,000
