The profit before tax, as reported in the statement of profit and loss for Aileen Ltd for the year ended 30 June 2020, amounted to $150,000, including the following revenue and expense items: Revenues Sales revenue $600,000 Interest revenue 60,000 Government grant 40,000 Expenses Cost of goods sold 300,000 Bad debts expense 8,000 Depreciation expense - equipment 6,000 Depreciation expense - plant 25,000 Research and development expense 51,000 Wages expense 120,000 Long service leave expense 40,000 The draft statement of financial position of Aileen Ltd at 30 June 2020 and the statement from last year showed the following assets and liabilities: 2019 2020 Assets Cash $30,000 $30,000 Inventory 100,000 150,000 Accounts receivable 50,000 70,000 Allowance for doubtful debts (5,000) (10,000) Interest receivable 25,000 20,000 Equipmentcost 30,000 30,000 Accumulated depreciation-equipment (12,000) (18,000) Plantcost 500,000 500,000 Accumulated depreciation-plant (50,000) (75,000) Goodwill 15,000 15,000 Deferred tax asset 33,000 ? Page 4 of 7 Liabilities Accounts payable 60,000 40,000 Wages payable 50,000 80,000 Revenue received in advance - 40,000 Loan payable 200,000 100,000 Provision for long-service leave 40,000 30,000 Deferred tax liability 18,730 ? Additional information: In the year ended 30 June 2019, Aileen Ltd had a tax loss of $70,000 that it carried over in the deferred tax asset. In June 2020, the company received an amended assessment for the year ended 30 June 2020 from the ATO, indicating that an amount of $10,000 claimed as a deduction has been disallowed. Aileen Ltd has not yet adjusted its accounts to reflect the amendment. The remaining losses can be used to offset taxable incomes in future periods. Amounts received from sales, including those on credit terms, are taxed at the time the sale is made. All other general taxation rules apply. The depreciation regimes for the financial reports and the company income tax return respectively, are listed below. Depreciation Regimes Equipment Plant Depreciation rate: Accounting 20% 20 yrs Tax 30% 10 yrs Method: Accounting Straight-line Straight-line Tax Reducing Balance Straight-line Residual: Zero Zero All research and development expenses were paid in cash during the year ended 30 June 2020. A tax deduction for development costs of 120% of the $51,000 spent during the year is available. All movements of deferred tax accounts during the year are not yet recongised. The company tax rate applicable is 30%. REQUIRED: (a) Determine the taxable profit for the year ended 30 June 2020. Start from the accounting profit before tax and show the adjustments for differences between taxation and accounting rules. (12 marks) (b) Complete the worksheet on the additional page provided to determine the movements in the deferred tax accounts for the year ended 30 June 2020. (15 marks) (c) Prepare the journal entries to recognise the current tax liability and the final deferred tax adjustments for the year ended 30 June 2020 including the movement during the year due to carry-forward tax loss. Note Aileen Ltd does not set off the deferred tax accounts against each other. (3 marks)