Reference no: EM132941795

The accounting profit before tax of john Ltd for the year ended 30 June 2019 was $200,000 after charging all expenses and recognising all items of revenue. The carrying amounts in the book of John of those assets and liabilities relevant to income taxes were as follows:

                                                                           2019                       2018
Equipment                                               ----                 200,000
Accumulated depreciation                           ----                (30,000)
Carrying amount                                        ----                170,000
Goodwill less allowances for impairment          190,000               160,000
Unearned insurance premiums                       54,000                  62,000

In preparing the Tax returns of the company the accountant included the following items:

Depreciation on equipment $50,000
Reduction on goodwill are not deductible for tax purposes. The company effective tax rate was 30%. Assume that the Recognition criteria was satisfied.

Problem 1: Prepare journal entries to recognise the tax consequence of these transactions in accordance with AASB 112. show working and calculations.