Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 3 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 $ $ 956 000 Gross profit Expenses Administration expenses Doubtful debts expense Salaries expense...... Interest Long-service leave Warranty expense Depreciation expense - plant Insurance expense. Accounting profit before income tax expense 62 000 18 000 205 000 12 000 30 000 35 000 80 000 25 000 467 000 489 000 utheast https://learn-ap-southeast... https://earn-ap-southeast... Home Western Sydney U... Al Paraphrasing 100 Chegg - Save up to 90% o... Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash 20 000 Inventory 105 000 Accounts Receivable (net of $5,000 D. Debt Allowance). 115 000 Prepaid insurance 2 000 Plant-cost 400 000 Accum Depn - Plant 160 000 240 000 . Liabilities Accounts Payable 80 000 Provision for warranty. 50 000 Provision for long-service leave 3 000 Loan Payable ......... 185 000 Additional information: Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. The administration expense includes payment of $12,000 for goodwill impairment. Bad debts written off during the year were $19,000. Insurance, warranty and long-service leave are deductible for tax purposes when paid. The tax rate is 30% . . eam-ap-southeast... https://learn-ap Required: (a) Calculate taxable income and its current tax consequences. (b) Complete the deferred tax worksheet (use the following template). 2. Determine future tax consequences for year end 30 June 2020 Carrying Tax Base Deductible Taxable 30 June 2020 Amount Temporary Temporary Differences Differences Income Tax Expense Income Tax Payable $ $ $ $ $ $ Assets Liabilities Temporary differences at period end Less: Prior period amounts Movement for the period Tax affected Tax on taxable income Income tax adjustments required (c) Prepare the journal entries for both the current and deferred tax consequences and for disclosure of deferred tax in the Balance Sheet. (narrations are required) Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 3 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 $ $ 956 000 Gross profit Expenses Administration expenses Doubtful debts expense Salaries expense...... Interest Long-service leave Warranty expense Depreciation expense - plant Insurance expense. Accounting profit before income tax expense 62 000 18 000 205 000 12 000 30 000 35 000 80 000 25 000 467 000 489 000 utheast https://learn-ap-southeast... https://earn-ap-southeast... Home Western Sydney U... Al Paraphrasing 100 Chegg - Save up to 90% o... Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash 20 000 Inventory 105 000 Accounts Receivable (net of $5,000 D. Debt Allowance). 115 000 Prepaid insurance 2 000 Plant-cost 400 000 Accum Depn - Plant 160 000 240 000 . Liabilities Accounts Payable 80 000 Provision for warranty. 50 000 Provision for long-service leave 3 000 Loan Payable ......... 185 000 Additional information: Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. The administration expense includes payment of $12,000 for goodwill impairment. Bad debts written off during the year were $19,000. Insurance, warranty and long-service leave are deductible for tax purposes when paid. The tax rate is 30% . . eam-ap-southeast... https://learn-ap Required: (a) Calculate taxable income and its current tax consequences. (b) Complete the deferred tax worksheet (use the following template). 2. Determine future tax consequences for year end 30 June 2020 Carrying Tax Base Deductible Taxable 30 June 2020 Amount Temporary Temporary Differences Differences Income Tax Expense Income Tax Payable $ $ $ $ $ $ Assets Liabilities Temporary differences at period end Less: Prior period amounts Movement for the period Tax affected Tax on taxable income Income tax adjustments required (c) Prepare the journal entries for both the current and deferred tax consequences and for disclosure of deferred tax in the Balance Sheet. (narrations are required)
