Prepare the deferred tax worksheet for Bell Limited for the year ended 2017 and prepare the necessary journal entries to record movements in the deferred tax accounts. (10 marks)

MASTER OF ACCOUNTING (Professional) ACCG926 CORPORATE ACCOUNTING Assessed Coursework 1 Assessed Coursework 1 Due date: Week 4 in your registered class Marks and percentages: This assessed coursework will be marked out of 10 marks and contributes towards 5% to your assessment. The following represents an extract from the Statement of Financial Position of the assets and liabilities of Bell Limited for the years ending 31 December 2017 and 2016. Assets Cash Accounts receivable (net) Inventory Interest receivable Deferred tax asset Development costs Less: Accumulated amortisation Plant & equipment Less: Accumulated depreciation Total Assets 2017 $ 110 000 45 000 65 000 8 400 ? 32 000 (8 000) 75 000 (22 000) 305 400 2016 $ 87 000 52 000 48 000 5 000 10 470 32 000 75 000 (13 500) 295 970 Liabilities Accounts payable Accrued expenses Deferred tax liability Rent revenue in advance Bank loan Provision for employee benefits Total Liabilities 28 500 7 200 ? 12 000 50 000 21 000 118 700 31 700 11 600 15 150 50 000 17 300 125 750 Additional Information a) The balance of allowance for doubtful debts for 2017 and 2016 was $5,000 and $6,000 respectively. b) Interest revenue is assessable when the cash is received. c) Development costs are deductible when paid together with an additional deduction of 50%. d) The tax depreciation rate for plant and equipment is double the rate of accounting. e) Accrued expenses are deductible when paid. f) Rent revenue is assessable when the cash is received. g) Employee benefits are deductible when the payment is made to the employee. h) The current tax rate is 30% Required: Prepare the deferred tax worksheet for Bell Limited for the year ended 2017 and prepare the necessary journal entries to record movements in the deferred tax accounts. (10 marks) ACCG926 s2 2017 Assessed coursework 1 Page 2 Answers: Carrying amount Tax Base Taxable Taxable temporary deductible difference difference Journal entry: ACCG926 s2 2017 Assessed coursework 1 Page 3