Question $1$

The statement of financial position of Ideal Trading Ltd as at $30$ June $2023$ is reproduced

below.

Statement of Financial position

Liabilities

Accounts payable $,55000$

Current tax payable $11000$

Accrued expenses $($ salaries &

wages$)$

Revenue received in advance

Deferred tax liability

Borrowings

Total liabilities

Additional information:

$($i$)$ Break$-$up of accrued revenue $K10000$ is as follows.

Interest receivable $($ K $6000),$ which will be taxed upon receipt.

A refund of a tax fine $($ K $4000),$ which will not be taxed upon

receipt.

$($ii$)$ Accrued expenses $($ salaries and wages$)$: a tax deduction will be claimed when an

actual payment of cash is made.

$($iii$)$Revenue received in advance is rent that was taxed on receipt.

$($iv$)$Property$,$ plant and equipment was revalued on $30$ June $2023$ by $K20000$ to K

$820000$ without change in the tax base.

$($v$)$ Accumulated tax deductions for depreciation are $K260000$ as at $30$ June $2023.$

$($vi$)$ Tax rate is $30\%.$

Required:

$($a$)$ Prepare a worksheet for deferred tax calculation. Use the sample format provided.

Students are not allowed to change the format

$($b$)$ Prepare relevant journal entries.

$(4$ Marks$)$

$($c$)$ Show entries in the statement of financial position in relation deferred tax.

$(4$ Marks$)$