Part B (10 marks) This question is not related to Part A

The following represents an extract from the Statement of Financial Position of the assets and liabilities of Henderson Limited for the years ending 30 June 2020 and 2019.

Assets

2020

$

2019

$

Cash

80 000

70 000

Accounts receivable

38 000

32 000

Allowance for doubtful debts

(4 000)

(3 200)

Inventory

42 000

36 000

Dividend receivable

8 000

7 500

Deferred tax asset

?

6 800

Development costs

40 000

40 000

Less: Accumulated amortisation

(10 000)

(5 000)

Plant and equipment

120 000

80 000

Less: Accumulated depreciation

(27 000)

(12 000)

Liabilities

Accounts payable

25 000

23 000

Interest payable

5 500

4 300

Deferred tax liability

?

13 240

Bank loan

40 000

40 000

Provision for annual leave

22 000

23 500

Additional Information:

a)Bad debts are deductible for tax purposes when they are written off.

b)Dividend revenue is assessable for tax purposes when the cash is received.

c)Tax deduction on interest is claimed when payments is made.

d)Tax deduction on developments is claimed at time of payment.

e)Henderson Limited purchased new plant and equipment on 1 January 2020. The accounting and tax depreciation rates of plant and equipment are 15% and 20% respectively.

f)Annual leave is deductible when the payments are made.

g)The taxable income of Henderson Limited for the year ended 30 June 2020 is $54,000.

h)The current tax rate is 30%.

Required:

a)Prepare the deferred tax worksheet for Henderson Limited for the year ended 30 June 2020 and prepare the journal entries to record movements in the deferred tax accounts. (8 marks)

b)Calculate the amount of income tax expense recognised in the income statement for the year ended 2020. (2 marks)