Question -

On 30 June 2019, ABC Ltd had the following temporary differences:

Accounts	Carrying amount ($)				Tax base ($)
Computers at cost		750,000				750,000
Accumulated depreciation - computers		(150,000)				(250,000)
Accounts receivable		250,000				250,000
Allowance for doubtful debts		(25,000)				(0)
Provision for warranty costs		75,000				0
Provision for long-service leave benefits		50,000				0

The following information was available for the following year, the year ending 30 June 2020.

Statement of profit or loss and other comprehensive income for ABC Ltd for the year ending 30 June 2020	$
Revenue	10,000,000
Cost of goods sold expense	(4,500,000)
Depreciation expense	(150,000)
Warranty expense	(225,000)
Doubtful debts expense	(62,500)
Other expenses	(3,437,500)
Profit before tax	1,625,000
Other comprehensive income	Nil

ABC Ltd depreciates computers over five years in its accounting records but over three years for tax purposes. The straight-line method is used. During the year, ABC wrote off bad debts amounting to $37,500. Warranty costs of $175,000 were paid during the year. No amounts were paid for long-service leave during the year. The following information was extracted from the statement of financial position on 30 June 2020:

	$
Assets
Accounts receivable	300,000
Allowance for doubtful debts	(50,000)
Liabilities
Provision for warranty costs	125,000
Provision for long-service leave benefits	75,000

There was no acquisition of plant and equipment during the year. The tax rate as at 30 June 2019 and 30 June 2020 was 30 per cent.

Required:

(a) Calculate ABC Ltds taxable profit for the year ending 30 June 2020. (2 marks)

(b) Calculate the amount of each of ABC Ltds temporary differences, if any, on 30 June 2019, and state whether it is deductible or taxable. (2 marks)

(c) Determine the balances of the deferred tax liability and deferred tax asset, if any, as of 30 June 2019? (2 marks)

(d) Prepare journal entries for current income taxes and deferred taxes for the year ending 30 June 2020. ABC Ltd offsets deferred tax assets and deferred tax liabilities. (4 marks)