Question 2 (12 marks)

The following represents an extract from the Statement of Financial Position of the assets and liabilities of Blue Limited for the years ending 30 June 2022 and 2021.

	2022	2021
$	$
Assets
Cash	16,800	20,400
Accounts receivable	16,500	13,800
Allowance for doubtful debts	(2,460)	(1,770)
Inventory	8,640	6,960
Interest receivable	2,160	1,740
Prepaid insurance	2,190	2,550
Deferred tax asset	?	3,646
Development costs	27,000	24,000
Less: Accumulated amortisation	(13,500)	(6,000)
Plant & equipment	36,000	49,500
Less: Accumulated depreciation	(21,600)	(22,500)
Liabilities
Accounts payable	5,700	5,100
Deferred tax liability	?	6,166
Unearned rent revenue	4,200	3,780
Bank Loan	15,000	15,000

Additional Information:

• Interest and rent revenue are assessable when the cash is received and deductible when the cash is paid. Insurance costs and warranty costs are allowed for tax deduction when the payment is made.
• A deduction for 125% development costs can be claimed when the costs are paid.
• Doubtful debts are deductible for tax purposes when the debt is written off.
• Blue Limited sold an item of equipment on 1 March 2022 for $6,500. For tax purposes the carrying amount of equipment sold was $5,700. There were no other disposals or acquisitions of equipment during the year.
• The tax deduction for depreciation for 2022 was $5,400 and the accumulated depreciation on 30 June 2021 for taxation purposes was $19,500.
• The taxable income of Blue Limited for the year ended 30 June 2022 is $64,800.
• The current tax rate is 30%

Required:

1. Prepare the deferred tax worksheet for Blue Limited for the year ended 30 June 2022 and prepare the necessary journal entries to record movements in the deferred tax accounts. (10 marks)
2. Calculate the amount of income tax expense recognised in the income statement for the year ended 2021. (2 marks)