Reference no: EM132582489
X company has the following baances at 30 june 2019:
asset or Liability Carrying Amount(000) Tax base(000)
COmputers
Cost 900 900
Less: Ac.depn (180) (300)
720 600
Account receivable 300 300
less: (30) 0
270 300
prov. for warranty costs 90 0
prov. for long service leave 60 0
the following statement of the comprehensive income for X company ltd for the year ended 30 june 2020 information is available.
000
Revenue 12000
Cost of goods sold expense (5400)
Depn expense (180)
Warranty expense (270)
Bad and doubtful expense (75)
other expenses (4125)
profit before tax 1950
X ltd used the straight line method and depreciates computers over five years in tis accounting records but over three years for tax purposes. The tax rate was 30% for both years.
During the year:
bad debts written off amounted to $45000
warranty costs paid amounted to $210000
NO amounts were paid for long service leave.
No acquisition of the plant and equipment was made.
The following information is extracted from the statement of financial position at 30 June 2020:
000 000
Assets liabilites
Acc. revceivable 360 prov. for warranty costs 150
allo for doubtful debts (60) prov. for emp.benefits (LSL)90
Question (a) Calculate Praise's taxable income and show the journal for the year ended 30 June 2020.
Question (b) Calculate the deferred tax using the worksheet and provide the deferred tax journals as at 30 June 2019.
Question (c) Calculate the deferred tax using the worksheet and provide the deferred tax journals as at 30 June 2020.