Reference no: EM132725666
Conan Pty Ltd recorded an accounting profit before tax of $750,000 for the year ended 30 June 2020. Included in the accounting profit were the following items of revenue and expense.
Entertainment expenses (non-deductible) for $50,000
Depreciation expense - Motor vehicle (10% p.a., straight-line) for $45,000
Rent revenue for $70,000
Penalties and fines for $2,500
Goodwill impairment for $40,000
Long service leave expense for $10,000
Annual leave expense for $20,000
For tax purposes the following applied
Depreciation expense - Motor vehicle (20%)
Rent received for $60,000
Long service leave paid for $2,000
Annual leave paid $12,500
Income tax rate (30%)
Required
Problem A. Use a current tax worksheet to calculate the current tax liability for the year ended 30 June 2020.
Problem B. Prepare the adjusting journal entry.
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