Practical Question 1 - Accounting for Income Tax - 15 Marks The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Bronze Ltd for the year ended 30 June 2020, amounted to $65,000 including the following revenue and expense items. 30 June 2020 $ Rent Expense Bad debts expense Depreciation expense - equipment Annual Leave Expense Interest Expense Fines and Penalties (non-deductible) Entertainment Expense (non-deductible) Interest on Govt Bonds (exempt from tax) 12,000 1,500 20,000 1,500 4,500 2,500 4,500 5,500 The statement of financial position of the company at 30 June 2020 showed the following assets and liabilities. The statement of financial position of the company at 30 June 2020 showed the following assets and liabilities. 2020 2019 Assets $ $ Cash Accounts receivables Allowance for doubtful debts Inventory Prepaid Rent Equipment Accumulated Depreciation - Equipment Deferred Tax Asset 9,000 32,000 (2,500) 11,500 22,000 100,000 (40,000) 11,000 25,000 (3,000) 8,500 10,000 100,000 (20,000) 2,010 ? Liabilities Accounts Payable Provision for Annual Leave Interest Payable Deferred Tax Liability 29,000 3,200 5,000 26,000 2,500 1,200 ? 6,000 . Additional information Accumulated depreciation of equipment for tax purposes was $60,000 at 30 June 2020, and depreciation for tax purposes for the year ended 30 June 2020 amounted to $30,000. Rent is assessable for tax when received. The tax rate is 30%. . Required 1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2020. (9 marks) 2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts as at 30 June 2020. (6 marks)