Create the deferred tax worksheet and tax journal entries

Assignment Help Accounting Basics

Reference no: EM132476337

Additional information

(a) For tax purposes the carrying amount of plant sold was $15 000.

(b)The tax deduction for plant depreciation was $20 250. The accumulated depreciation on plant for tax purposes at 30 June 2019 is $40 250 (2018: $35 000).

(c)In the year ended 30 June 2018, the company recorded a tax loss. At 1 July 2018 carry forward tax losses amounted to $16 900. The company recognised a deferred tax asset in respect of these tax losses at 30 June 2018.

(d)Tax losses carried forward must be offset against any exempt income before being used to reduce taxable income.

(e)The company does not set off deferred tax liabilities and assets and the corporate tax rate is 30%.

Required

Question 1: Prepare the deferred tax worksheet as at 30 June 2019 and the tax journal entries.

Question 2: Discuss the factors the company should have considered before recognising a deferred tax asset with respect to the tax loss incurred in the year ended 30 June 2018?

Attachment:- Tax worksheet.rar

Reference no: EM132476337

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