Paul Ltd was established on 1 July 2019 with share capital totalling $132,000 One year later at 30 June 2020, the trial balance of the company was as follows Cash $24,000 Accounts Receivable $37,500 Allowance for Doubtful Debts $200 Interest receivable $100 Inventory $20,000 Prepaid Insurance $300 Machinery at cost $79,000 Accumulated depreciation for Machinery $5,900 Vehicles at cost $11,000 Accumulated depreciation for Vehicles $100 Goodwill $45,000 Accumulated impairment loss $300 Investments $25,000 Accounts payable $15,000 Rent payable $6,000 Provision for annual leave $1,800 Provision for services warranties $600 Share capital $132,000 Sales revenue $650,000 Interest revenue $500 Dividend revenue $300 Exempt income $400 Capital profit on sale of land $700 Cost of sales $175,000 Depreciation $6,000 Goodwill impairment loss $300 Salaries and wages $120,000 Annual leave $1,800 Rent $72,000 Insurance $1,200 Entertainment $400 Fines and penalties $100 Fringe benefits tax $200 Warranty expense $600 Doubtful debts $200 Other expenses $194,100 Total $813,800 Additional information For tax purposes, depreciation on machinery is $14,000 and for vehicles $300, for the year ended 30 June 2020 Doubtful debts, annual leave and service warranties are expensed in the year ending 30 June 2020 but are not tax deductible for tax purposes until paid Paul Ltd has accrued annual leave entitlements of $1,800 in calculating net profit for the year ended 30 June 2020 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 customer's 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 Required How to calculate deferred tax worksheet Complete the general journal entry to account for income tax How to do a statement of comprehensive income for the year ended 30 June 2020 How to do a balance sheet at 30 June 2020 Discuss whether you think the deferred tax assets and liabilities are assets and liabilities in relation to the definitions contained in the conceptual framework

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 27, 2024

Paul Ltd was established on 1 July 2019 with share capital totalling $132,000. One year later at 30 June 2020, the trial balance of the

Paul Ltd was established on 1 July 2019 with share capital totalling $132,000.

One year later at 30 June 2020, the trial balance of the company was as follows:

Cash $24,000

Accounts Receivable $37,500

Allowance for Doubtful Debts $200

Interest receivable $100

Inventory $20,000

Prepaid Insurance $300

Machinery at cost $79,000

Accumulated depreciation for Machinery $5,900

Vehicles at cost $11,000

Accumulated depreciation for Vehicles $100

Goodwill $45,000

Accumulated impairment loss $300

Investments $25,000

Accounts payable $15,000

Rent payable $6,000

Provision for annual leave $1,800

Provision for services warranties $600

Share capital $132,000

Sales revenue $650,000

Interest revenue $500

Dividend revenue $300

Exempt income $400

Capital profit on sale of land $700

Cost of sales $175,000

Depreciation $6,000

Goodwill impairment loss $300

Salaries and wages $120,000

Annual leave $1,800

Rent $72,000

Insurance $1,200

Entertainment $400

Fines and penalties $100

Fringe benefits tax $200

Warranty expense $600

Doubtful debts $200

Other expenses $194,100

Total $813,800

Additional information:

For tax purposes, depreciation on machinery is $14,000 and for vehicles $300, for the year ended 30 June 2020.
Doubtful debts, annual leave and service warranties are expensed in the year ending 30 June 2020 but are not tax deductible for tax purposes until paid.
Paul Ltd has accrued annual leave entitlements of $1,800 in calculating net profit for the year ended 30 June 2020.
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 customer's 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.

Required:

How to calculate deferred tax worksheet.
Complete the general journal entry to account for income tax.
How to do a statement of comprehensive income for the year ended 30 June 2020.
How to do a balance sheet at 30 June 2020.
Discuss whether you think the deferred tax assets and liabilities are assets and liabilities in relation to the definitions contained in the conceptual framework.