The profit before tax, as reported in the statement of profit or loss and other comprehensive income

of Sunshine Ltd for the year ended $30$ June $20$X$4,$ amounted to $$500,000,$ including the following

revenue and expense items.

$

Rent revenue $25,000$

Gain on sale of plant $15,000$

Doubtful debts expense $10,000$

Insurance expense $17,000$

Depreciation expense $$ plant $40,000$

Annual leave expense $20,000$

Long service leave expense $12,000$

Entertainment costs $($non$-$deductible$)5,000$

The statement of financial position of the company at $30$ June $20$X$4$ showed the following assets and

liabilities.

$20$X$420$X$3$

Assets $ $

Cash $50,00035,000$

Inventories $220,000250,000$

Accounts receivable $110,000100,000$

Allowance for doubtful debts $(2,000)(6,000)$

Prepaid insurance $7,0005,000$

Plant $200,000240,000$

Accumulated depreciation $$ plant $(80,000)(48,000)$

Deferred tax assets $?26,100$

Liabilities

Accounts payable $40,00035,000$

Provision for annual leave $9,00015,000$

Provision for long service leave $57,00050,000$

Rent received in advance $13,00016,000$

Deferred tax liability $?5,700$

Additional information

$$ All plant was acquired on $1$ July $20$X$2.$ Plant is depreciated on a straight line bases over $5$ years for

accounting purposes and over $4$ years for tax purposes. On $1$ July $20$X$3$ Plant with a cost of $$40,000$

was sold.

$$ Doubtful Debts are recognised as a deduction for tax purposes when the debt is written off.

$$ Insurance is recognised as a deduction for tax purposes when the cash is paid.

$$ Rent is assessable for tax purposes when the cash is received.

$$ Annual leave and long service leave are deductible for tax purposes when the cash is paid.

$$ Entertainment costs are not deductible for tax purposes.

$$ The tax rate is $30\%$

Required

$1.$ Prepare a current tax worksheet and the journal entry to recognise the company$$s current tax

liability as at $30$ June $20$X$4.$

$2.$ Prepare a deferred tax worksheet and journal entry to recognise the movements in the

company$$s deferred tax assets and liabilities for the year ended $30$ June $20$X$4.$

$3.$ Specify the total amount of Income Tax Expense that would be recognised by the company for

the year ended $30$ June $20$X$4.$