Question
You are an accountant working at Mel Ltd and you have the following information for the 30 June 2020 year end: 1) Revenue received in
You are an accountant working at Mel Ltd and you have the following information for the 30 June 2020 year end:
1) Revenue received in advance has a balance of $250,000
2) There was a loan payable of $400,000. $100,000 should be paid by the end of the day.
3) Accounts receivable is $300,000. Allowance for doubtful debts is $60,000.
4) Accrued warranty is $300,000 in the event there are product returns.
5) A machine was purchased on the first day of the current financial year for $250,000 with depreciation expected to be 25% on a straight-line basis. Tax law allows for a different write-off however and depreciation can be expensed over two years.
The tax rate is 30%.
What are the total balances of deferred tax asset and deferred tax liability for 30 June 2020. Show all workings.
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