The accounting profit before tax of Raffles Ltd for the year ended 30 June 2019 was $1,250,000 and included the following items of income and expense:

Government grant 50,000

Rent revenue 80,000

Political donations 20,000

Bad debts expense 7,500

Depreciation of plant 280,000 I

nsurance expense 24,000

Long service leave expense 40,000

Warranty expense 30,000

The draft statements of financial position at 30 June 2019 and 30 June 2018 included the following assets and liabilities:

2019 2018

Accounts Receivable 535,000 485,000

Allowance for doubtful debts (84,000) (80,000)

Prepaid insurance 15,000 12,000

Plant 2,800,000 2,800,000

Accumulated depreciation - plant (380,000) (100,000)

Deferred tax asset ? 25,000

Rent received in advance 100,000 80,000

Provision for Warranty 30,000 26,000

Long service leave payable 14,000 21,000

Deferred tax liability ? 48,000

Additional information: 1. For accounting purposes, the plant is depreciated at 10% straight line. For tax purposes, the plant is depreciated at 20% straight line. 2. The tax rate is 30%.

Required: a) Calculate the taxable income and hence the current tax liability for Raffles Ltd. (11 marks)

b) Using the general journal, record the current tax liability for Raffles Ltd. as at 30 June 2019. (2 marks)

c) Using an appropriate worksheet, calculate the balance day adjustments to deferred tax asset and deferred tax liability accounts as at 30 June 2019. (12 marks)

d) Using the general journal, record the adjustments to deferred tax asset and deferred tax liability accounts as at 30 June 2019. (2 marks)