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The accounting profit before tax for the year ended 30 June 2022 for Quamby Ltd amounted to $28 500 and included the following. Depreciation expense
The accounting profit before tax for the year ended 30 June 2022 for Quamby Ltd amounted to $28 500 and included the following. Depreciation expense - motor vehicle (25% p.a., straight-line) Depreciation expense - equipment (20% p.a., straight-line) Rent revenue Royalty revenue (non-taxable) Doubtful debts expense Entertainment expense (non-deductible) Annual leave expense Gain on sale of equipment $ 4500 20 000 16 000 5 000 2 300 1 500 5 000 1 000 The draft statement of financial position at 30 June 2022 contained the following assets and liabilities 2022 2021 Assets Cash Accounts receivable 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 $13 200 12 000 (3 000) 19 000 2 800 18 000 (15 750) 100 000 (60 000) $ 9800 14 000 (2 500) 21 500 2 400 18 000 (11 250) 130 000 (52 000) 6 450 15 665 4 500 21 500 6 000 8 200 3 445 Additional information The motor vehicle is fully depreciated for tax purposes. The company claims tax depreciation on equipment at the rate of 15% p.a. The sale of equipment on which a gain was recognised (see above) was the only movement in the equipment account during the year and took place on 1 July 2021. 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 2022 2. Prepare the deferred tax worksheet and any necessary journal entries to adjust deferred tax accounts
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