Question
The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Paul Ltd for the year ended 30
The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Paul Ltd for the year ended 30 June 2021, amounted to $50,000 including the following revenue and expense items.
| June 2021 |
| $ |
Interest revenue | 6,750 |
Bad debts expense | 9,000 |
Depreciation expense - plant | 10,500 |
Annual Leave Expense | 3,750 |
Rent Expense | 3,000 |
Fines and Penalties (non-deductible) | 750 |
Government grant (exempt from tax) | 13,500 |
Additional information:
a. The deduction for depreciation for tax purposes was $10,000.
b. Bad debts written off for the year were $8,250.
c. Interest revenue is receivable in advance and is taxed when received. Total cash receipts for interests were $12,000 during the year.
d. The annual leave provision was $3,000 at the end of the year (the opening balance was $2,000).
e. Rent payments of $4,500 were made during the year.
f. The tax rate is 30%.
Required
Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021.
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