The accounting profit before tax for the year ended 30 June 2016 for Alex Ltd amounted to $18 500 and included:

Depreciation ? motor vehicle (25%)	$ 4 500
Depreciation ? equipment (20%)	20 000
Rent revenue	16 000
Royalty revenue (non-taxable)	5 000
Doubtful debts expense	2 300
Entertainment expense (non-deductible)	1 500
Proceeds on sale of equipment	19 000
Carrying amount of equipment sold	18 000
Annual leave expense	5 000

The draft statement of financial position at 30 June 2016 contained the following assets and liabilities.

	2016	2015
Assets
Cash	$ 11 500	$ 9 500
Receivables	12 000	14 000
Allowance for doubtful debts	(3 000)	(2 500)
Inventories	19 000	21 500
Rent receivable	2 800	2 400
Motor vehicle	18 000	18 000
Accumulated depreciation ? motor vehicle	(15 750)	(11 250)
Equipment	100 000	130 000
Accumulated depreciation ? equipment	(60 000)	(52 000)
Deferred tax asset	?	6 450
		136 100
Liabilities
Accounts payable	15 655	21 500
Provision for annual leave	4 500	6 000
Current tax liability	?	7 600
Deferred tax liability	?	2 745
		37 845

Additional information

(a) The company can claim a deduction of $15 000 (15%) for depreciation on equipment, but the motor vehicle is fully depreciated for tax purposes.

(b) The equipment sold during the year had been purchased for $30 000 2 years before the date of sale.

(c) The company tax rate is 30%.

Required

1. Prepare the current tax worksheet and the journal entry to recognise the current tax as at 30 June 2016.

2. Prepare the deferred tax worksheet and any necessary journal entries to adjust deferred tax accounts.

Corporate Reporting (ACC2CRE) Case Study (5 Marks) Accounting for Income Tax Group Assignment Group Members (Max 4) Due date: Friday (5.00pm), 15 April, 2016 1. The assignment is a compulsory group assignment and is worth 5% of the total marks of the subject. 2. The group should be comprised of four (4) students. It is the responsibility of students to form the groups. Only one copy of the group assignment must be submitted on behalf of the group by one of the group members. Students must make sure that the completed Assignment Declaration form is attached including students' details (students' names and IDs) with the assignment. 3. You must keep a copy of your assignment (in hard copy form) until you receive the marked original back. If your assignment is lost and you fail to provide us with a copy of the assignment when requested, we will assume the assignment was not written and the penalties for late assignment will be applied. 4. The assignment must be presented in a professional manner (word processed). 5. Submissions must be properly referenced (refer to the University Style Guide). 6. Plagiarism is a serious matter; all students involved will be referred to the University's appropriate authority. 7. Late submission will incur a penalty of one mark per day including the weekend. Late submission must be lodged with Course Coordinator only. 1 8. Application for extensions must be lodged with the Course Coordinator before due date in writing for granting an extension (medical problems etc.). 9. Assignment must be submitted through the LMS. Note 1: Word limit for the Question is 500. 2 The accounting profit before tax for the year ended 30 June 2016 for Alex Ltd amounted to $18 500 and included: Depreciation motor vehicle (25%) Depreciation equipment (20%) Rent revenue Royalty revenue (non-taxable) Doubtful debts expense Entertainment expense (nondeductible) Proceeds on sale of equipment Carrying amount of equipment sold Annual leave expense $ 4 500 20 000 16 000 5 000 2 300 1 500 19 000 18 000 5 000 The draft statement of financial position at 30 June 2016 contained the following assets and liabilities. 2016 Assets Cash Receivables Allowance for doubtful debts Inventories Rent receivable Motor vehicle Accumulated depreciation motor vehicle Equipment Accumulated depreciation equipment Deferred tax asset Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability 2015 $ 11 500 12 000 (3 000) 19 000 2 800 18 000 (15 750) 100 000 (60 000) ? $ 9 500 15 655 4 500 ? ? 21 500 6 000 7 600 2 745 37 845 14 000 (2 500) 21 500 2 400 18 000 (11 250) 130 000 (52 000) 6 450 136 100 Additional information (a) The company can claim a deduction of $15 000 (15%) for depreciation on equipment, but the motor vehicle is fully depreciated for tax purposes. (b) The equipment sold during the year had been purchased for $30 000 2 years before the date of sale. (c) The company tax rate is 30%. 3 Required 1. Prepare the current tax worksheet and the journal entry to recognise the current tax as at 30 June 2016. 2. Prepare the deferred tax worksheet and any necessary journal entries to adjust deferred tax accounts. 4