Reference no: EM132672473

The following information was extracted from the records of Grand Ltd as at 30 June 2021.

                                    Carrying amount                     Tax base

Asset (liability)

Accounts receivable           $150 000                          $175 000

Motor vehicles                   165 000                               125 000

Provision for warranty                (12 000)                          0

The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Warranty costs are deductible when paid. An allowance for doubtful debts of $25 000 has been raised against accounts receivable for accounting purposes, but such debts are deductible only when written off as non-collectible.

Required

Problem 1: Prepare deferred tax worksheet and calculate the temporary differences for Grand Ltd as at 30 June 2021. Justify your classification of each difference as either a deductible temporary difference or a taxable temporary difference.