Question 1:

Question 1 Basin Ltd's statement of profit or loss for the year ended 30 June 2021 and extracts from its statements of financial position as at 30 June 2021 and 30 June 2020 are shown below. The statements for the current year are yet to be finalised by accounting for income tax. Basin Ltd Statement of Profit or Loss for the year ending 30 June 2021 Income Service revenue $ 900 000 Rent revenue 50 000 Insurance claim for loss of profits 41 200 991 200 Less: Expenses Employee expenses 660 000 Insurance expense 50 000 Accounting fees 5 500 Bad and doubtful debts 19 500 Cleaning and maintenance 3 250 Depreciation of equipment 5 500 Entertainment expenses 4 000 Interest on borrowings 75 000 Legal fees 3 800 Motor vehicle expenses 6 000 Other 3 750 Restructuring costs 23 000 859 300 Profit before tax $ 131 900 Rasin Ltd Statement of Financial Position (Extract) as at 30 June 2021 2020 Assets Cash at bank $ 900 100 $ 800 100 Trade debtors 240 550 200 000 Allowance for doubtful debts (38 000) (20 000) Prepaid insurance 10950 5 000 Land - at fair value 450 000 300 000 Equipment - at cost 58 000 58 000 Accumulated depreciation (24 500) (19 000) Other debtors 142 400 Deferred tax asset ? 18 000 Liabilities Trade creditors 239 000 245 000 Borrowings 543 800 438 500 Unearned rent revenue 50 000 Provision for employee benefits 49 500 40 000 Provision for restructuring 23 000 Other creditors 10 000 Current tax liability 13 300 Deferred tax liability 32 700 Additional information (a) The original cost of the land is $200 000 (b) The tax written down value of equipment at 30 June 2021 is $28 000 (2020: $35 000). During the 2021 year, there were no additions or disposals of equipment. (c) Legal fees of $3800 are capital in nature and non-deductible for tax purposes. (d) Other creditors at 30 June 2021 include an accrual for accounting fees of $4500 for work not yet performed (2020: $Nil). For tax purposes, the accounting fees are deductible only if work has been performed (e) For tax purposes, restructuring costs are deductible only when paid. (1) Other debtors at 30 June 2021 include $41 200 relating to an insurance claim that is in- process. Insurance income is only assessable for tax purposes after the insurance proceeds have been received (g)The corporate tax rate is 30%. Required: i. Prepare the current tax worksheet for the year ending 30 June 2021 and the current tax entries for the year. ii. Prepare the deferred tax worksheet at 30 June 2021 and the deferred tax entries for the year