Prepare general journal entries on June

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Question - Swiftsure Ltd has carried forward a deferred tax liability of 170000, arising from differences between carrying amount and tax bases of the company's assets. On 30 June 2013, the carrying amounts and tax bases of the company's assets were as follows:

Assets

Carrying amount

Tax base

A

$142000

$108000

B

$541000

$340000

C

$820000

$610000

D

$86000

$40000

The current income tax expense for the year ended 30 June 2013 is $8400000 and tax rate is 30%.

Required -

(a) Prepare general journal entries on 30 June 2013 to record company's income tax expense.

(b) How would your answer differ if the balance of the deferred tax liability carried forward was $120000?

Reference no: EM132678253

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