Question 4 (25 Marks)

Toowoomba Tech (TT) reported a profit before tax for the year to 30 June 2021 of $180 000. The companys statements of financial position include assets and liabilities as follows:

	2021	2020
Accounts receivable	$49000	$40000
Allowance for doubtful debts	(4000)	(2000)
Plant at cost	120000	120000
Accumulated depreciation	(38000)	(24000)
Development asset at cost	72000	40000
Accumulated amortization	(26000)	(16000)
Interest receivable	2000	4000
Provision for long-service leave	9600	12400
Deferred tax asset	?	4320
Deferred tax liability	?	12000

(a) The company is entitled to claim a tax deduction of 125% on development costs when incurred. (b) Interest revenue of $2 000 is included in the profit for the year to 30 June 2021.

(c) Expenses included in profit for the year to 30 June 2021 are as follows: Environmental damage fines $2 000 Depreciation expense for plant $14 000 Doubtful debts expense $5 000 Amortization of development asset $10 000 Long-service leave expense $7 200.

(d) Accumulated depreciation on plant for tax purposes is $56 000 on 30 June 2021 and $36 000 on 30 June 2020. There have been no acquisitions or disposals of plant during the current year.

(e) The corporate tax rate is 30%. Required: Complete the current tax and deferred tax worksheets of TT and prepare the tax entries for 30 June 2021