Reference no: EM132840268

Question - You are provided with the following information from the accounts of KPM Ltd for the year ending 30th June, 2019, as shown in the table below:

Accounting Information	($) Amount
Cash Sales	500,000
Cost of Goods Sold	45,000
Amount received in advance for services to be performed in August 2019	9,500
Rent expenses for year ended 30th June, 2019	9,000
Rent Prepaid for two months to 31st August, 2019	1,200
Doubtful debts expenses	1,200
Amount provided in 2019 for employees' long-service leave entitlements	5,000
Goodwill impairment expenses	3,000

Required -

a) Calculate the taxable profit and accounting profit for the year ending 30th June, 2019.

b) NRP Ltd has the following deferred tax balances as at 30th June, 2019. Deferred tax asset $800,000 Deferred tax liability $600,000. The above balances were calculated when the tax rate, was 20 per cent. On 1st December, 2019 the government raises the corporate tax rate to 25 per cent.

c) Need the journal entries to adjust the carry-forward balances of the deferred tax asset and deferred tax liability.