please show your workings
Current Income Tax - 10 Marks The profit before tax of Tote Ltd for the year ended 30 June 20x4 is $480 000 and includes the following revenue and expense items: Rent revenue Government grant received Bad debts expense Depreciation expense - plant Long-service leave expense Office supplies expense Entertainment expenses 24 000 8 000 48 000 40 000 60 000 12 000 14 400 Extracts from the statements of financial position of the company at 30 June 20x4 and 30 June 20x3 showed the following assets and liabilities: 20x3 TOTE LTD Statement of Financial Position (Extract) as at 30 June 20x4 Assets Cash $ 64 000 Inventory 136 000 Accounts receivable 400 000 Allowance for doubtful debts (44000) Office supplies 20 000 Plant 400 000 Accumulated depreciation (208 000) Goodwill 56 000 Deferred tax asset ? Liabilities Accounts payable 232 000 Provision for long service leave 80 000 Rent received in advance 20 000 Deferred tax liability ? $ 68 000 124 000 384 000 (32 000) 17 600 400 000 (168 000) 56 000 32 400 208 000 60 000 16 000 30 480 Additional information a) Entertainment costs are not allowed as tax deductions. The government grant revenue is not assessable for tax purposes. b) Accumulated depreciation of plant for tax purposes was $252 000 at 30 June 20x3, and depreciation for tax purposes for the year ended 30 June 20x4 amounted to $60 000. c) Office supplies are claimed as a tax deduction when purchased. Purchases of supplies was $14,400. Rent is taxed when received. d) The tax rate is 30%. Required: This question has two parts. Answer Parts (a) and (b) below: Part (a) - 9 Marks Using the reconciliation process calculate the taxable income and the company's current tax liability as at 30 June 20x4. A separate answer box has been provided below for your workings. Part (b) - 1 Mark Prepare the journal entry to record the entity's current tax obligation at 30 June 20x4. 7 A B I c? ! Account DR CR Current Income Tax - 10 Marks The profit before tax of Tote Ltd for the year ended 30 June 20x4 is $480 000 and includes the following revenue and expense items: Rent revenue Government grant received Bad debts expense Depreciation expense - plant Long-service leave expense Office supplies expense Entertainment expenses 24 000 8 000 48 000 40 000 60 000 12 000 14 400 Extracts from the statements of financial position of the company at 30 June 20x4 and 30 June 20x3 showed the following assets and liabilities: 20x3 TOTE LTD Statement of Financial Position (Extract) as at 30 June 20x4 Assets Cash $ 64 000 Inventory 136 000 Accounts receivable 400 000 Allowance for doubtful debts (44000) Office supplies 20 000 Plant 400 000 Accumulated depreciation (208 000) Goodwill 56 000 Deferred tax asset ? Liabilities Accounts payable 232 000 Provision for long service leave 80 000 Rent received in advance 20 000 Deferred tax liability ? $ 68 000 124 000 384 000 (32 000) 17 600 400 000 (168 000) 56 000 32 400 208 000 60 000 16 000 30 480 Additional information a) Entertainment costs are not allowed as tax deductions. The government grant revenue is not assessable for tax purposes. b) Accumulated depreciation of plant for tax purposes was $252 000 at 30 June 20x3, and depreciation for tax purposes for the year ended 30 June 20x4 amounted to $60 000. c) Office supplies are claimed as a tax deduction when purchased. Purchases of supplies was $14,400. Rent is taxed when received. d) The tax rate is 30%. Required: This question has two parts. Answer Parts (a) and (b) below: Part (a) - 9 Marks Using the reconciliation process calculate the taxable income and the company's current tax liability as at 30 June 20x4. A separate answer box has been provided below for your workings. Part (b) - 1 Mark Prepare the journal entry to record the entity's current tax obligation at 30 June 20x4. 7 A B I c? ! Account DR CR
