Calculate the deferred tax liability and deferred tax asset

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Question - On the 30 June 2021 Efficient Ltd had a balance of $198,000 in its deferred tax liability account and $76,000 in its deferred tax asset account. As of 30June 2022, the taxable temporary differences totalled $720,000 and the deductible temporary differences totalled $330,000. Accounting profit before tax for the year ended 30 June 2022 was $900,000. This profit includes entertainment expense $200,000; government grants $30,000; accounting depreciation $7,500 (tax depreciation $5,500); warranty expense $2,000 (cash payment $1,000). Assume a current tax rate of 30%.

Required - Calculate the deferred tax liability and deferred tax asset on 30 June 2022 and prepare the journal entry to record the deferred tax amounts.

Reference no: EM133127405

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