Question 3 10 points Save Answer Question 3 Woodie Ltd has requested that you prepare the tax-effect accounting information for the year ended 30 June 2020. The following has been extracted from their internal reports: -Accounting profit before tax for the year. .... $ 875,000 -Expenses brought to account included: Depreciation - plant.. .... $93,000 Non-deductible fine................... ........ ...... $3,900 Impairment loss on goodwill....... ... $12,000 Long service leave........ ............... $14,500 - Accumulated depreciation on plant for tax purposes was $130,000 on 30 June 2019 and $270,000 on 30 June 2020. There were no additions or disposals of plant during the year. - Bad debts of $14,700 were written off during the year against the Allowance for Doubtful Debts. - On 1 January 2020 the company income tax rate was reduced from 30% to 25%, effective for the 2019/20 tax year and onwards. The deferred tax opening balances on 1 July 2019 were: Deferred Tax Asset (based on DTD of $ 85,000)................... $ 25,500 Deferred Tax Liability (based on TTD of $ 65,000)............... $ 19,500 (DTD: deductible temporary differences; TTD: taxable temporary differences) - Reporting date is 30 June. Relevant assets and liabilities as disclosed in the Balance Sheet as at 30 June 2020 were: Assets Relevant assets and liabilities as disclosed in the Balance Sheet as at 30 June 2020 were: Assets Accounts Receivable... .... ......... $ 250,000 Less: Allowance for Doubtful Debts [2019 $11,000)............. 15,000 $235,000 Inventory...... .. 286,000 Plant - cost......... ..... $750,000 Less: Accumulated Depreciation - Plant........................ 175,000 575,000 Liabilities Accounts Payable..... .... $ 182,000 Provision for long-service leave................. [2019 $57,000)................. 63,000 Required: (1) Provide the journal entry to adjust the opening deferred tax accounts due to the tax rate change. (Narrations are required) (2 marks) (ii) Show the calculation of income tax expense and income taxable payable. (8 marks) TT T Arial 3 (12pt) T-5 - E S O 's