QUESTION THREE (15 marks in total...2 parts to the question) 18D0 The following table represents an extract of the trial balance (assets & liabilities only) for Instagram Limited. 2014 2013 600 Writeh off Cash Accounts Receivable (net Prepaid Insurance Plant & Equipment 125 000117 000 45 00032 000 10 000 160 000124 000 Sbo 3moD ISDo Accounts Payable Emplovee Entitlements brA Unearned Revenue DT Bank Loan 31 000 26 000 27 000 32 000 5 500 71 500 70 000 Additional Information The balance of allowance for doubtful debts for 2014 and 2013 is $7 500 and $5 000 respectively. During the year debts totalling $4 000 were written off Prepaid expenses are claimed as a deduction when the cash payment is made The tax base for Plant & Equipment has been calculated to be $110 000 as at 30 June 2014 and $100 000 at 30 June 2013. soo /Deductions for employee entitlements are allowed when the leave is paid. Unearned Revenue represent cash received for work not yet performed. It is recognized as a liability for accounting purposes as it is not yet earned but is taxed on a cash basis The bank loan relates to an amount payable in foreign currency, this loan was taken out on 30 Junc 2013. The movement in loan balance relates to movement in exchange rates whereby all payables in a foreign currency are restated at the exchange rate at balance date. Unrealised gains and losses are not included in taxable income until the gain/loss is realised. The deferred tax balances as at 30 June 2013 recognized in the Statement of Financial Position were $7 200 for the deferred tax liability and $9 300 for the deferred tax asset. Tax rate is 30% Required: a) From the above trial balance, calculate the deferred tax balances (DTL and DTA) as at 30 b) Determine the end of year adjustments in deferred tax assets and deferred tax liabilities. June 2014 using a worksheet, detailing carrying amounts (CA) and tax bases (TB) (10 marks) Prepare the journal entries for the adjustments in accordance with IAS 12. Show all calculations