Practical Question 1 Accounting for Income Tax Current Tax Worksheet - 9 Marks

The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Apple Ltd for the year ended 30 June 2020, amounted to $65,000 including the following revenue and expense items:

	30 June 2020
	$
Rent Expense	12,000
Bad debts expense	500
Depreciation expense - equipment	10,000
Annual Leave Expense	1,500
Interest Expense	4,500
Fines and Penalties (non-deductible)	2,500
Entertainment Expense (non-deductible)	700
Interest on Govt Bonds (exempt from tax)	2,500

Additional information:

1. The deduction for depreciation for tax purposes is double the accounting depreciation.
2. No bad debts were written off during the year.
3. Rent of $15,000 was prepaid at the beginning of the year and is deducted for tax purposes when paid.
4. Annual leave paid during the year was $500.
5. Interest payments of $4,000 were made in cash.
6. The tax rate is 30%.

Required

Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2020. (9 marks)