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The statements of financial position of DaJ en Ltd at 30 June 2019 and 30 June 2013 include the following assets and liabilities: DAJ EN

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The statements of financial position of DaJ en Ltd at 30 June 2019 and 30 June 2013 include the following assets and liabilities: DAJ EN LTD Statement of Financial Position (Extract) as at 30 June 2018 Assets Cash 6 000 18 000 Accounts receivable 96 000 85 000 Allowance for doubtful debts (6 800) (5 200) Prepaid insurance 3 400 5 600 Plant 140 000 170 000 Accumulated depreciation plant (32 000) (28 000) Goodwill 22 200 22 200 Accumulated impairment losses (11 100) Deferred tax asset 7 9 540 Liabilities Accounts payable 78 000 76 000 Provision for long-service leave 13 200 9 700 Current tax liability ? Deferred tax liabili ? 3780 Additional information (a) For tax purposes the carrying amount of plant sold was $15 000. (b) The tax deduction for plant depreciation was $20 250. The accumulated depreciation on plant for tax purposes at 30 June 2019 is $40 250 (2018: $35 000). (c)ln the year ended 30 June 2018, the company recorded a tax loss. At 1 July 2018 carry forward tax losses amounted to $16 900. The company recognised a deferred tax asset in respect of these tax losses at 30 June 2018. (d) Tax losses carried forward must be offset against any exempt income before being used to reduce taxable income. (e) The company does not set off deferred tax liabilities and assets and the corporate tax rate is 30%. Required A. Prepare the current tax worksheet for the year ended 30 June 2019 and the tax journal entries. 11 marks B. Prepare the deferred tax worksheet as at 30 June 2019 and the tax journal entries. 15 marks C. Discuss the factors the company should have considered before recognising a deferred tax asset with respect to the tax loss incurred in the year ended 30 June 2018? 4 marks

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