THE FOLLOWING INFORMATION RELATES TO QUESTIONS 5 TO 6 Tom Ltd's accounting profit for the year ended 30 June 2020 was $350,000 which included the following items: Item $ 25,000 Amortisation expense 8,000 Depreciation expense - Equipment 45,000 Long service leave expense 10,000 Doubtful debts expense Below is an extract from Tom Ltd's statement of financial position as at 30 June 2020 Below is an extract from Torn Ltd's statement of financial position as at 30 June 2020 $ Assets 60,000 Cash 28,000 Inventory 75,000 Software development intangible asset 50,000 (25,000) Less: Accumulated amortisation 255.000 Accounts receivable (gross) 240.000 (15,000) Less: Allowance for doubtful debts 40.000 Equipment 32.000 (8,000) Less: Accumulated depreciation 410.000 Total Assets Provision for long service leave 65,000 Total Liabilities 265,500 Additional information: Software development costs of $75,000 incurred on 1 July 2019 were capitalised as an Intangible asset at this date. For accounting purposes, Tom Ltd has decided to amortise the software development costs on a straight-line basis over three (3) years. Tom Ltd has not entered into any arrangement to transfer this interest to a 3rd party at the end of its useful life. For tax purposes, the software development costs are deductible at the time the software development costs were originally incurred. The tax and accounting treatment of sales, cost of sales, accounts receivable (gross) and accounts payable are the same. The balance of the allowance for doubtful debts account at 1 July 2019 was $6,000. A tax deduction is allowed for bad debts when they are written off. The balance of the provision for long service leave account at 1 July 2019 was $50,000. Long service leave is deductible for tax purposes when paid. The equipment is depreciated on a straight basis over five (5) years with a zero (O) estimated residual value. The tax depreciation rate for equipment is 15% based on reducing balance each year. The company income tax rate is 30% Tom Ltd is a reporting entity, has adopted AASB 112: Income Taxes and uses a 30 June year end balance date. Accounts receivable (gross) 255.000 15.000) 240.000 Less: Allowance for doubtful debts 40,000 Equipment 32.000 (8,000) Less: Accumulated depreciation 410.000 Total Assets Llabilities 120,500 Accounts payable 80,000 Loans 65,000 Provision for long service leave 265,500 Total Liabilities Additional information: Software development costs of $75,000 incurred on 1 July 2019 were capitalised as an intangible asset at this date. For accounting purposes, Tom Ltd has decided to amortise the software development costs on a straight-line basis over three (3) years. Tom Ltd has not entered into any arrangement to transfer this of its useful life. For tax purposes, the software development costs are deductible at the time the software development costs 6 pts Question 5 Recommended time to complete: 10 minutes Required: Calculate taxable income of Tom Ltd for year ended 30 June 2020. Include all workings. Note: In your answer it is advisable to build a table with headings. Below is a suggested form of presentation. Use the table tool( ) to build the table and enter your answer into the table. Additional lines maybe required. Workings can be included above the table. Workings: $ Item/Details Question 6 Recommended me to complete: 10 minutes Suggested word length for written answer for Part (a): One (1) paragraph, 30 relevant words Suggested word length for written answer for Part (b): One (1) paragraph, 30 relevant words Suggested word length for written answer for Part (c): One (1) paragraph, 30 relevant words Required: Determine the tax base amount ($) for the following account balances from the Tom Ltd statement of financial position at 30 June 2020. Include one (1) supporting reason for each tax base determination and any necessary workings. (a) Accounts receivable (gross) (2 marks); (b) Equipment (2 marks); and (c) Provision for long service leave (2 marks). Paragraph references from AASB 112 are not required in your answers. Note: In your answer it is advisable to build a table with headings. Below is a suggested form o presentation. Use the table tool( ) to build the table and enter your answer into the table. Additional lines maybe required. One (1) Supporting Reason and any Necessary Workings Account Balance Name Tax Base Amount($) (a) 1 THE FOLLOWING INFORMATION RELATES TO QUESTIONS 5 TO 6 Tom Ltd's accounting profit for the year ended 30 June 2020 was $350,000 which included the following items: Item $ 25,000 Amortisation expense 8,000 Depreciation expense - Equipment 45,000 Long service leave expense 10,000 Doubtful debts expense Below is an extract from Tom Ltd's statement of financial position as at 30 June 2020 Below is an extract from Torn Ltd's statement of financial position as at 30 June 2020 $ Assets 60,000 Cash 28,000 Inventory 75,000 Software development intangible asset 50,000 (25,000) Less: Accumulated amortisation 255.000 Accounts receivable (gross) 240.000 (15,000) Less: Allowance for doubtful debts 40.000 Equipment 32.000 (8,000) Less: Accumulated depreciation 410.000 Total Assets Provision for long service leave 65,000 Total Liabilities 265,500 Additional information: Software development costs of $75,000 incurred on 1 July 2019 were capitalised as an Intangible asset at this date. For accounting purposes, Tom Ltd has decided to amortise the software development costs on a straight-line basis over three (3) years. Tom Ltd has not entered into any arrangement to transfer this interest to a 3rd party at the end of its useful life. For tax purposes, the software development costs are deductible at the time the software development costs were originally incurred. The tax and accounting treatment of sales, cost of sales, accounts receivable (gross) and accounts payable are the same. The balance of the allowance for doubtful debts account at 1 July 2019 was $6,000. A tax deduction is allowed for bad debts when they are written off. The balance of the provision for long service leave account at 1 July 2019 was $50,000. Long service leave is deductible for tax purposes when paid. The equipment is depreciated on a straight basis over five (5) years with a zero (O) estimated residual value. The tax depreciation rate for equipment is 15% based on reducing balance each year. The company income tax rate is 30% Tom Ltd is a reporting entity, has adopted AASB 112: Income Taxes and uses a 30 June year end balance date. Accounts receivable (gross) 255.000 15.000) 240.000 Less: Allowance for doubtful debts 40,000 Equipment 32.000 (8,000) Less: Accumulated depreciation 410.000 Total Assets Llabilities 120,500 Accounts payable 80,000 Loans 65,000 Provision for long service leave 265,500 Total Liabilities Additional information: Software development costs of $75,000 incurred on 1 July 2019 were capitalised as an intangible asset at this date. For accounting purposes, Tom Ltd has decided to amortise the software development costs on a straight-line basis over three (3) years. Tom Ltd has not entered into any arrangement to transfer this of its useful life. For tax purposes, the software development costs are deductible at the time the software development costs 6 pts Question 5 Recommended time to complete: 10 minutes Required: Calculate taxable income of Tom Ltd for year ended 30 June 2020. Include all workings. Note: In your answer it is advisable to build a table with headings. Below is a suggested form of presentation. Use the table tool( ) to build the table and enter your answer into the table. Additional lines maybe required. Workings can be included above the table. Workings: $ Item/Details Question 6 Recommended me to complete: 10 minutes Suggested word length for written answer for Part (a): One (1) paragraph, 30 relevant words Suggested word length for written answer for Part (b): One (1) paragraph, 30 relevant words Suggested word length for written answer for Part (c): One (1) paragraph, 30 relevant words Required: Determine the tax base amount ($) for the following account balances from the Tom Ltd statement of financial position at 30 June 2020. Include one (1) supporting reason for each tax base determination and any necessary workings. (a) Accounts receivable (gross) (2 marks); (b) Equipment (2 marks); and (c) Provision for long service leave (2 marks). Paragraph references from AASB 112 are not required in your answers. Note: In your answer it is advisable to build a table with headings. Below is a suggested form o presentation. Use the table tool( ) to build the table and enter your answer into the table. Additional lines maybe required. One (1) Supporting Reason and any Necessary Workings Account Balance Name Tax Base Amount($) (a) 1