You have been asked by the accountant of Fennel Ltd to prepare the tax-effect accounting adjustments for the year ended 30 June 2014. Investigations revealed the following information:

(a) In September 2012, the government reduced the company tax rate from 40 cents to 30 cents in the

dollar, effective from 1 July 2013.

(b) The profit for the year ended 30 June 2014 was $920 000. (c) The assets and liabilities at 30 June were:

(d) The company is entitled to claim a tax deduction of 125% for development expenditure in the year of expenditure. The company has adopted the accounting policy of capitalising and then amortising the expenditure over five years.

(e) Revenue for the year included: Non-taxable income

(f) Expenses brought to account included: Depreciation buildings

Depreciation plant

Impairment goodwill (non-deductible) Amortisation development expenditure

(See the pictures) thank you !

Exercise 6.9 CURRENT AND DEFERRED TAX WITH TAX RATE CHANGE You have been asked by the accountant of Fennel Ltd to prepare the tax-effect accounting adjustments for the year ended 30 June 2014. Investigations revealed the following information (a) In September 2012, the government reduced the company tax rate from 40 cents to 30 cents in the dollar, effective from 1 July 2013 (b)The profit for the year ended 30 June 2014 was $920000 (c) The assets and liabilities at 30 June were: 2014 2013 Accounts receivable Allowance for doubtful debts Inventory Land Buildings Accumulated depreciation- buildings Plant $ 235 000 $ 200000 (13 000) 250000 100000 800000 (99000) 600000 (12 000) 220000 100000 800000 (70000) 600000 (continued) CHAPTER 6 Income taxes205 Exercise 6.9 CURRENT AND DEFERRED TAX WITH TAX RATE CHANGE You have been asked by the accountant of Fennel Ltd to prepare the tax-effect accounting adjustments for the year ended 30 June 2014. Investigations revealed the following information (a) In September 2012, the government reduced the company tax rate from 40 cents to 30 cents in the dollar, effective from 1 July 2013 (b)The profit for the year ended 30 June 2014 was $920000 (c) The assets and liabilities at 30 June were: 2014 2013 Accounts receivable Allowance for doubtful debts Inventory Land Buildings Accumulated depreciation- buildings Plant $ 235 000 $ 200000 (13 000) 250000 100000 800000 (99000) 600000 (12 000) 220000 100000 800000 (70000) 600000 (continued) CHAPTER 6 Income taxes205