Thomastown Ltd commences its operations on 1 July 2020. One year after the commencement of its operations (30 June 2021) the entity presents its first Statement of Comprehensive Income and Statement of Financial Position on 30 June 2021. The statements are prepared before considering taxation. The following information is available..

Thomastown Ltd

Statement of Comprehensive Income for the year ended 30 June 2021

	$
Gross Profit	13,440,000
Expenses:
Administrative expenses	1,411,200
Salaries	1,008,000
Provision for doubtful debts	336,000
Long service leave	672,000
Warranty expenses	403,200
Depreciation expense Machinery	536,000
Depreciation expense Building	160,000
Insurance	369,600
	4,986,000
Accounting profit for the year	8,454,000

Thomastown Ltd

Assets and Liabilities as disclosed in the Statement of Financial Position

for the year ended 30 June 2021

	$	$
Assets
Cash		272,000
Account Receivables (net)		1,008,000
Inventory		1,540,800
Prepaid insurance		138,400
Machinery cost	5,360,000
Less accumulated depreciation	536,000
		4,824,000
Building - cost	4,000,000
Less accumulated depreciation	160,000
		3,840,000
Total assets		11,623,200
Liabilities
Payables		1,075,200
Provision for long service leave		235,200
Provision for warranty expenses		268,800
Bank loan		2,600,000
Total liabilities		4,179,200
Net assets		7,444,000

0ther information:

• All administration and salaries expenses incurred have been paid as at year-end.
• Insurance was initially prepaid to the amount of $508,000. At the year-end, the unused component of the prepaid insurance amounted to $138,400. Actual amounts paid are allowed as a tax deduction.
• The amount of $436,800 long service leave expense has been paid.
• The machinery is depreciated over 10 years for accounting purposes, but over 8 years for taxation purposes.
• The building is depreciated over 25 years for accounting purposes, but over 20 years for taxation purposes.
• Amounts received from sales, including those on credit terms, are taxed at the time of the sale is made.
• Warranty expenses were accrued and, at the year-end, actual payments of $134,400 had been made (leaving of accrued balance of $268,800). Deductions for tax purposes are only available when the amounts are paid and not as they accrued.
• The tax rate is 30 per cent.

Required:

1. Compute the taxable income or loss. (using excel spreadsheet)
2. Complete the Taxation Worksheet in accordance with AASB 112 Income Taxes. (using excel spreadsheet)
3. Prepare the applicable journal entries at 30 June 2021 to account for tax using the balance sheet method.

Note: Copy the excel spreadsheets and paste on the word document. use Australian tax laws.

Below given is the worksheet need to be filled using excel for requirement 2.

Thomastown Ltd

Taxation Worksheet as at 30 June 2021

Item	Carrying amount $	Tax Base $	Deductable Temporary Difference $	Taxable Temporary Difference $	Tax Expense $	Tax Payable $