Reference no: EM132216952

Part A -

Carol Ltd recorded an accounting profit before tax of $100,000 for the year ended 30 June 2016. Included in the accounting profit were the following items of revenue and expenses:

Entertainment expense (non-deductible) - $2,000

Depreciation-vehicles (10%) - 17,000

Rent revenue - 2,500

For tax purposes the following applied:

Depreciation rate - vehicles - 15%

Rent received - $3,000

Income tax rate - 30%

Required - Use a current tax worksheet to calculate the current tax liability for the year ended 30 June 2016. Prepare the adjusting journal entry. No narrations are required.

Part B -

The statements of financial position of Jones Ltd at 30 June 2015 showed the following assets and liabilities:

	2015	2014
Assets
Cash	80,000	85,000
Inventory	170,000	155,000
Receivables	500,000	480,000
Allowance for doubtful debts	(55,000)	(40,000)
Plant	500,000	500,000
Accumulated depreciation	(260,000)	(210,000)
Deferred tax asset	?	40,500
Liabilities
Accounts payable	290,000	260,000
Provision for long service leave (LSL)	60,000	45,000
Rent received in advance	25,000	20,000
Deferred tax liability	?	38,000

Additional Information:

• Accumulated depreciation of plant for tax purposes was $315,000 at 30 June 2014, and depreciation for tax purposes for the year ended 30 June 2015 amounted to $75,000.
• The tax rate is 30%.

Required - Prepare a worksheet to calculate the end of reporting period adjustment to deferred tax asset and liability accounts as at 30 June 2015, and complete the necessary journal entry.