Reference no: EM131598884

Question - Calculation of current and deferred tax

The following data applies to the two unrelated companies Lloyd Ltd and Cole Ltd:

Lloyd Ltd  Cole Ltd

Profit before tax for the year to 30 June 2017                     $1300 000 $136 000

Taxable income for the year to 30 June 2017                      340 000 150 000

Deferred tax liability 1 July 2016                                                 - 90 000

Deferred tax asset 1 July 2016                                                    - 15 000

Taxable temporary differences at 30 June 2017                 960 000 306 000

Deductible temporary differences at 30 June 2017           - 70 000

All taxable and deductible temporary differences relate to the profit or loss. Assume a corporate tax rate of 30%.

Required - For each company, prepare the journal entries to record the current and deferred tax for 30 June 2017.