Profit before tax for Rum Ltd for the year ended 31 Dec 2017 is as follows (IAS12)(6 Marks)

ITEMJOD

Sales2,650

Interest Revenue60

Governmental Grant160

COGS(350)

Entertainment Expense(160)

Donations to political parties(450)

Depreciation(60)

Goodwill Impairment(40)

Bad Debts Expense(40)

Other Expenses(220)

Profit before Tax1'550

Further Information:

• JOD70 allowed as a tax deduction for equipment.
• Interest has not yet been received.
• Bad debts of JOD30 have been written off during the year.
• Donations to political parties are non-deductible
• The tax rate is 40%

Required:

1. Calculate the Current Tax Liability of Rum Ltd for 2017
2. Prepare the Journal Entries, assuming that JOD 120 was paid on 15/4/2018

Answer rating: 100% (QA)

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