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The profit before tax, reported in the statement of comprehensive income of Sam Ltd for the year ended 3 0 June 2 0 2 3

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The profit before tax, reported in the statement of comprehensive income of Sam Ltd for the year ended 30 June 2023
amounted to: 59,00,000
Subscription revenue 1,84,000
Government award income 3,31,000
Doubtful debts expense 36,000
Depreciation (Equipment)3,59,400
Depreciation (Buildings)1,10,625
Maintenance expense 1,65,000
Employee benefits expense 1,10,000
Rent expense 55,000
Entertainment expense 92,100
The draft statements of financial position of the company at 30 June 2023 and 2022 showed the following assets and liabilities:
Assets in 2023
Cash 3,87,000
Inventory 8,29,000
Accounts receivable 23,96,000
Allowance for doubtful debts -1,91,000
Prepaid rent 1,03,000
Equipment 23,96,000
Accumulated depreciation - Equipment -17,97,000
Buildings 14,75,000
Accumulated depreciation - Buildings -11,06,250
Land 9,21,000
Goodwill (net)3,68,000
Deferred tax asset ?
Assets in 2022
Cash 4,24,000
Inventory 7,55,000
Accounts receivable 22,86,000
Allowance for doubtful debts -1,77,000
Prepaid rent 95,000
Equipment 23,96,000
Accumulated depreciation - Equipment -14,37,600
Buildings 14,75,000
Accumulated depreciation - Buildings -9,95,625
Land 9,21,000
Goodwill (net)3,68,000
Deferred tax asset 18,840
Liabilities 2023
Liabilities
Accounts payable
14,01,000
Provision for maintenance
2,95,000
Provision for employee benefits
2,02,000
Subscription received in advance
1,29,000
Deferred tax liability
?
Liabilities 2022
Liabilities
Accounts payable 12,53,000
Provision for maintenance 2,21,000
Provision for employee benefits 1,47,000
Subscription received in advance 92,000
Deferred tax liability 0
Additional Information:
Subscription revenue is tax assessable when it is received in cash
Government award income is not tax assessable
Doubtful debts are tax deductible when the company actually incurs bad debts/write off
For accounting purpose, the equipment is depreciated using the annual straight line method at a rate of:
15%
For tax purpose, however, the equipment is depreciated using the annual straight line method at a rate of:
20%
Depreciation of buildings is not allowed as tax deductions and goodwill is not tax assessable
Employee benefits are tax deductible when they are paid in cash to the employees
Rent expense and maintenance expense are tax deductible when paid in cash
Entertainment expense is not allowed as tax deduction
Assume a tax rate for the financial years ending 30 June 2022 and 2023 to be:
30%
Required:
Calculate the taxable income/tax loss and the current tax liability (if any) for the financial year ended 30 June 2023.
Prepare a journal entry to recognise the current tax liability/tax loss.
Calculate deferred tax asset and deferred tax liability balances as at 30 June 2023.
Prepare the deferred tax journal entries for the year ended 30 June 2023.
Note that you are NOT required to prepare journals to offset the deferred tax asset and deferred tax liability balances.
Show your calculation using deferred tax worksheets by creating separate columns for:
carrying amount, tax base, taxable temporary differences and deductible temporary differences.
Assume that by 1 December 2023 there was a change in tax rate to:
27.50%
With reference to AASB112 Income Taxes, discuss the accounting treatment of the deferred tax asset and deferred tax liability
balances as at 1 December 2023 following a lower tax threshold for the 2023-2024 financial year.
Prepare the journal entries to record the effect of change in tax rate.
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