Reference no: EM132642699

Kali Ltd reported a Profit before Income Tax Expense of $1,700,000 for the year ended 30 June 2020 .

Additional Information:

1. On 1 July 2016, Kali Ltd purchased a building at a cost of $3,000,000. For accounting purposes, the building is depreciated on a straight-line basis over 30 years, with zero residual value. For income tax purposes the building is depreciated 5% on cost per annum.
2. On 30 June 2019, the balance of the provision for warranty expenditure in Kali Ltd's accounts was $450,000. During the year ending 30 June 2020, Kali Ltd provided an additional $250,000 for warranty expenditure, and paid warranty expenditure of $290,000. For income tax purposes, warranty expenditure is deductible when it is paid.
3. On 9 September 2015, Kali Ltd purchased Land at a cost of $950,000. On 30 June 2020, the land was revalued to $1,300,000.
4. On 30 June 2020, Kali Ltd recognised a goodwill impairment loss expense of $320,000. For income tax purposes, goodwill impairment loss is not tax deductible.
5. The company income tax rate is 30%.

Required:

Question a) Calculate the balance of the deferred tax assets and deferred tax liabilities at 30 June 2019 and 30 June 2020 for Kali Ltd, in accordance with AASB112: Income Taxes. Show all workings necessary to derive your answer.

Question b) Calculate taxable income and income tax payable for Kali Ltd for the financial year ending 30 June 2020. Show all workings necessary to derive your answer.

Question c) Prepare the journal entry for Kali Ltd, to record income tax for the financial year ending 30 June 2020, in accordance with AASB112: Income Taxes. Show all workings necessary to derive your answer.