Skylar Ltd commenced operations on 1 July 2016. It disclosed a net profit before tax of $90,000 for the year ended 30 June 2017.

This profit was determined after charging the following items:

Impairment loss- goodwill $4,000

Depreciation of Plant & Equipment $15,000

Depreciation of motor vehicles $5,000

Doubtful Debts $5,000

Increase in Provision for Employee Entitlements $12,000

On 30 June 2017, the accounting and taxation records disclosed the following:

	Carrying Amount		Tax Base
ASSETS Plant & Equipment Accumulated Depn: Motor Vehicles Accumulated Depn: Cash Accounts-Receivable (Net) LIABILITIES Accounts-Payable Provn for Employee Entitlements NET ASSETS	60,000 -15,000 30,000 -5,000	45,000 25,000 20,000 85,000 175,000 50,000 42,000 92,000 83,000	60,000 -20,000 30,000 -7,500	40,000 22,500 20,000 90,000 172,500 50,000 30,000 80,000 92,500

Additional information:

The plant and equipment, which cost 60,000 was purchased on 1 July 2016 and is being depreciated at 25% for accounting purposes and at 33-1/3% for tax purpose.

The doubtful debts are not allowed for tax purposes.

There were no employee entitlements taken during the 2017 financial year.

The motor vehicle, which was purchased on 1 July 2017 and cost $30,000 is depreciated over 6 years for accounting purposes and over 4 years for tax purposes. Assume straight line depreciation with NIL salvage value.

Impairment loss for goodwill is not allowable as a tax deduction.

Consider if the difference is deductible in the future or taxable, to identify if there is a deferred tax liability or Deferred tax asset.