Prepare the tax effect Journal Entries for the following independent situations and explain why each gives rise to a Deferred Tax Asset or a Deferred Tax Liability at 30 June.

• Tax rate is 30%.
• Enter your answers in the tables provided.

a. A company has a doubtful debt expense of $3000. This is not an allowable deduction for income tax purposes.

Account	Debit	Credit
	$
		$
Explanation:

b. A publishing company has received $20,000 in subscriptions in advance of publications on 30 June. This revenue will start to be recognised in the accounting records over the next four years. This amount is treated as assessable income for income tax purposes in the current year.

Account	Debit	Credit
	$
		$
Explanation:

c. Plant and machinery were acquired for $200,000 on 1 July. Accounting depreciation is 25% p.a. and tax depreciation is 30% p.a.

Account	Debit	Credit
	$
		$
Explanation: