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The profit before tax, as reported in the statement of profit or loss and other comprehensive income of Mackay Ltd for the year ended 30

The profit before tax, as reported in the statement of profit or loss and other comprehensive income of Mackay Ltd for the year ended 30 June 2018, amounted to $60 000, including the following revenue and expense items:

Rent revenue

$3 000

Bad debts expense

6 000

Depreciation of plant

5 000

Annual leave expense

3 000

Entertainment costs (non-deductible)

1 800

Depreciation of buildings (non-deductible)

800

The statement of financial position of the company at 30 June 2018 showed the following net assets.

2018

2017

Assets

Cash

8 000

8 500

Inventories

17 000

15 500

Receivables

50 000

48 000

Allowance for doubtful debts

(5 500)

(4 000)

Office supplies

2 500

2 200

Plant

50 000

50 000

Accumulated depreciation

(26 000)

(21 000)

Buildings

30 000

30 000

Accumulated depreciation

(14 800)

(14 000)

Goodwill (net)

7 000

7 000

Deferred tax asset

?

4 050

Liabilities

Accounts payable

29 000

26 000

Provision for long service leave

6 000

4 500

Provision for annual leave

4 000

3 000

Rent received in advance

2 500

2 000

Deferred tax liability

?

3 150

Additional information

(a) Accumulated depreciation of plant for tax purposes was $31 500 at 30 June 2017, and depreciation for tax purposes for the year ended 30 June 2018 amounted to $7500.

(b) The tax rate is 30%.

Required:

Prepare a current tax worksheet and the journal entry to recognise the companys current tax liability as at 30 June 2018. Also provide workings for allowance for doubtful debts, provision for annual leave, provision for long service leave and rent received in advance.

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