Tax Rate is 30%

In accordance to IAS 12/AASB 112 Income taxes

White Ltd commenced business on 1 July 2017. An extract of the statement of financial position of White Ltd for the year ending 30 June 2019 and 2020 are shown below: Assets 2020 2019 Cash $ 5,000 $ 3,800 Accounts receivable 18,000 15,000 Allowance for doubtful debt (880) (600) Dividend receivable 800 380 Inventory 13,000 14.000 Prepaid insurance 3,800 2,000 Interest receivable 700 500 Machinery 40,000 40,000 Accumulated depreciation-machinery (12,000) (4,000) Land 35,000 25,000 Building 500,000 500,000 Accumulated depreciation-building (150.000) (125,000) Deferred tax asset ? 600 Liabilities Accounts payable Current tax liability Provision for Warranty Interest payable Debentures Dividend payable Deferred tax liability 2,000 350 600 900 17,000 5,000 ? 3,000 400 700 1,200 15,000 5,000 200 Additional information: 1. Depreciation for accounting and tax purposes are 20% and 25% straight-line method, respectively. 2. Depreciation for building is non-deductible for tax purpose. 3. Bad debt expense for the year ended 2020 amounted to $350. 4. A payment of $3,000 was made to Rail Insurance Ltd. 5. Interest income recognized for the year ended 2020 is $700. 6. Land was revalued to its fair value in 2020. 7. Warranty and interest expenses for the current period are $250 and $300, respectively. 8. Half of the deferred tax asset amount is due to tax loss in 2019, which will be recouped in 2020. 9. The accounting profit before tax for the year ended 30 June 2020 is $38,000. 10. There are no other differences between accounting profit before tax and taxable income to account for. 11. The tax rate is 30% Required: Prepare a deferred tax worksheet for the year ended 30 June 2020, and associated journal entries in accordance to IAS 12/AASB 112 Income Taxes. (25 marks) White Ltd commenced business on 1 July 2017. An extract of the statement of financial position of White Ltd for the year ending 30 June 2019 and 2020 are shown below: Assets 2020 2019 Cash $ 5,000 $ 3,800 Accounts receivable 18,000 15,000 Allowance for doubtful debt (880) (600) Dividend receivable 800 380 Inventory 13,000 14.000 Prepaid insurance 3,800 2,000 Interest receivable 700 500 Machinery 40,000 40,000 Accumulated depreciation-machinery (12,000) (4,000) Land 35,000 25,000 Building 500,000 500,000 Accumulated depreciation-building (150.000) (125,000) Deferred tax asset ? 600 Liabilities Accounts payable Current tax liability Provision for Warranty Interest payable Debentures Dividend payable Deferred tax liability 2,000 350 600 900 17,000 5,000 ? 3,000 400 700 1,200 15,000 5,000 200 Additional information: 1. Depreciation for accounting and tax purposes are 20% and 25% straight-line method, respectively. 2. Depreciation for building is non-deductible for tax purpose. 3. Bad debt expense for the year ended 2020 amounted to $350. 4. A payment of $3,000 was made to Rail Insurance Ltd. 5. Interest income recognized for the year ended 2020 is $700. 6. Land was revalued to its fair value in 2020. 7. Warranty and interest expenses for the current period are $250 and $300, respectively. 8. Half of the deferred tax asset amount is due to tax loss in 2019, which will be recouped in 2020. 9. The accounting profit before tax for the year ended 30 June 2020 is $38,000. 10. There are no other differences between accounting profit before tax and taxable income to account for. 11. The tax rate is 30% Required: Prepare a deferred tax worksheet for the year ended 30 June 2020, and associated journal entries in accordance to IAS 12/AASB 112 Income Taxes. (25 marks)