Question $3$

Tax Effect Accounting

$25$ Marks

The following amounts have been extracted from the Statement of Financial Position of Niugini Ltd as at $31$ December $2021$ prior to deferred tax adjustments.

$\backslash$table$[[,,,\backslash$table$[[$Temporary$],[$difference$]]],[,\backslash$table$[[$Carrying$],[$amount$]],\backslash$table$[[$Tax$],[$base$]],$Taxable,Deductible$],[$Assets$,,,,],[$Accounts receivable,$25000,25000,,],[$Less: Provision,$(2000),,,],[$Inventories$,18000,18000,,],[$Accrued revenue,$10000,4000,,],[$Investments$,250000,250000,,],[$Goodwill$,85000,,,],[$Loan$,800000,800000,,],[\backslash$table$[[$Property plant and$],[$equipment$]],(250000),(260000),,],[\backslash$table$[[$Less: Accumulated$],[$depreciation$]],956000,922000,,],[,55000,55000,,],[$Liabilities$,11000,11000,,],[$Accounts payable,$6000,,,],[$Current tax payable,$3000,,,],[$Accrued expenses $($salaries$),1000,1000,,],[\backslash$table$[[$Revenue received in$],[$advance$]],283000,283000,,],[$Deferred tax liability,$359000,350000,,],[$Borrowings$,,,,],[,,,,],[,,,,]]$

The above information should be read in conjunction with the following information.

$($i$)$ Accrued revenue of $K10000$ is in two parts:

a$.$ Interest receivable $(K6000),$ which will be taxed upon receipt

b$.$ A refund of tax fine $(K4000),$ which will be assessable when received.

$($ii$)$ Accrued expenses $($salaries$)$: 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$)$ Accumulated tax deductions for depreciation are K $260000$ as at $31$ December $2021.$

Required:

$($a$)$ Complete the worksheet for calculation of deferred tax balances.

$(19$ Marks$)$

$($Note: Students are advised to answer this question on the question paper$)$

$($b$)$ Prepare journal entries to record deferred tax including any entry to off$-$set balances.

$(6$ Marks$)$

Notes: plesse provide the solution not steps on how to get the answers.