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Prepare the journal entry to record current tax

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Question - Banjo Ltd recorded an accounting profit before tax of $200 000 for the year ended 30 June 2021. Included in the accounting profit were the following items of revenue and expense.

Entertainment expenses (non-deductible) $4,000

Depreciation expense - furniture (10% p.a., straight-line) 34,000

Rent revenue 5,000

For tax purposes, the following applied.

Depreciation rate - furniture 15%

Rent received $6,000

Income tax rate 30%

Required - Use a current tax worksheet to calculate the current tax liability for the year ended 30 June 2021. Prepare the journal entry to record current tax. Why tax effect adjustments are required?

Reference no: EM132908677

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