Reference no: EM132845988
Question - You have been asked by the management of ABC Ltd to assist with the preparation of the income tax entries for the year ended 30 June 2020. The company reported a profit before tax for the year to 30 June 2020 of $900,000.
(a) Interest revenue of $10 000 is included in the profit for the year to 30 June 2020; and the total amount of cash interest received this year is $20 000.
(b) Expenses included in profit for the year to 30 June 2020 are as follows:
depreciation expense for plant $50 000
doubtful debts expense $25 000; the bad debt written-off is $15 000 this year.
warranty expense $36 000; the warranty paid is 50 000 in the current period.
(c) Accumulated depreciation on plant for tax purposes is $300 000 on 30 June 2020 and $150 000 on 30 June 2019. There have been no acquisitions or disposals of plant during the current year.
(d) The corporate tax rate is 30%.
Required - Complete the current tax worksheets of ABC Ltd and prepare the tax entries for 30 June 2020.
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