Reference no: EM132571240
Question - The following information relates to Sydney Ltd.'s expenses and profits for the year ended 30 June 2019. Assuming the company tax rate is 30%.
Accounting Profit before tax $210 000
The accounting profit above has considered the following expenses:
Depreciation of plant and equipment $18 000
Long service leave expense 8 000
Doubtful debts expense 5 000
Goodwill impairment 2 000
Additional information:
Tax depreciation allowed on plant and equipment is $20 500
Amounts paid during the year for long service leave amounted to $3 500.
Bad debts written off during the year amounted to $1 500.
Required - Calculate the taxable income and the current tax liability for the year ended 30 June 2019 for Sydney Ltd by reconciling accounting profit to tax profit. Also provide a journal entry for the current tax liability. Narrations are not required. Show workings.