Q2

You have been asked by the management of Mok Ltd to assist with the preparation of the income tax entries for the year ended 30 June 2018. The company reported a profit before tax for the year to 30 June 2018 of $900 000. The companys statements of financial position include assets and liabilities as follows:

	2018	2017
Accounts receivable	$ 245 000	$ 200 000
Allowance for doubtful debts	(20 000)	(10 000)
Plant at cost	600 000	600 000
Accumulated depreciation	(190 000)	(120 000)
Development asset at cost	360 000	200 000
Accumulated amortisation	(130 000)	(80 000)
Interest receivable	10 000	20 000
Provision for long-service leave	48 000	62 000
Deferred tax asset	?	21 600
Deferred tax liability	?	60 000

(a) The company is entitled to claim a tax deduction of 125% on development costs when incurred.

(b) Interest revenue of $10 000 is included in the profit for the year to 30 June 2018.

(c) Expenses included in profit for the year to 30 June 2018 are as follows:

parking and other fines $10 000

depreciation expense for plant $70 000

doubtful debts expense $25 000

amortisation of development asset $50 000

long-service leave expense $36 000.

(d) Accumulated depreciation on plant for tax purposes is $280 000 on 30 June 2018 and $180 000 on 30 June 2017. There have been no acquisitions or disposals of plant during the current year.

(e) The corporate tax rate is 30%.

Required

Complete the current tax and deferred tax worksheets of Mok Ltd and prepare the tax entries for 30 June 2018.