Red Hill Ltd had a tax loss of $10,100 for the year ended 30 June 2019. The financial statements of Red Hill Ltd for the year ended 30 June 2020 showed a profit before tax of $50,000, including the following items of income and expense:

Impairment of goodwill	6,000
Depreciation expense equipment	30,000
Bad debts expense	3,200
Long service leave expense	8,000
Insurance expense	1,000

Additional Information for 30 June 2020:

• The tax deduction for equipment depreciation was $40,000.
• The balance in the Allowance for Doubtful Debts account at 30 June 2019 was $7,500, and at 30 June 2020 the balance in the account was $5,000.
• Long service leave costs of $12,000 had been paid during the current year.
• The balance of the Prepaid Insurance account at 30 June 2019 was $2,400, and the balance in the account at 30 June 2020 was $1,800.
• The tax rate is 30%.

Required:

(a) Prepare the complete current tax worksheet for the year ended 30 June 2020 and the journal entries to record current tax (and/or deferred tax). Narrations are not required.

(b) A depreciable non-current asset, with differing depreciation rates for accounting and tax purposes, can lead to the recognition of either a Deferred Tax Asset or a Deferred Tax Liability. In each case, explain how the Deferred Tax Asset and Deferred Tax Liability is created.

(c) Explain how the Development Costs account can lead to the recognition of a Deferred Tax Liability.