Reference no: EM132756420
Problem - Karrot Ltd has applied AASB112 Income Taxes for the year ended 30 June 2020. The following information is available from the current and deferred tax worksheets:
After using a previous tax loss of $8,000, a final taxable income of $12,000 was calculated.
Total taxable temporary differences are $78,000 and total deductible differences are $30,000.
The beginning balance for deferred tax liability is $25,000 and the beginning balance for deferred tax asset is $8,500.
The company income tax rate is 30%.
Required - For the year ended 30 June 2020:
a) Prepare the current tax journal entry.
b) Prepare the deferred tax journal entry.
c) Calculate the total income tax expense that Karrot Ltd can now report in the Statement of Profit or Loss.