Reference no: EM132847051
Question - Quigley Limited recorded the following at 30 June 2021 (prior to the recording of tax entries):
Extract from trial balance 2021 $
Trade receivables 82,000
Allowance for impairment loss: trade receivables (2,000)
Plant 250,000
Accumulated depreciation - plant (50,000)
Prepaid insurance 5,700
Contract liability (15,000)
Additional information:
A bad debt deduction is only allowed when previously brought to account as income and specifically written off as bad.
The plant was acquired on 1 July 2020.
The tax depreciation rate for plant is 10%, straight line.
Insurance is deductible for tax purposes when paid.
The contract liability is comprised of revenue received in advance. It is assessable for tax purposes when received, but will be recognised as revenue in the year ending 30 June 2022.
The tax rate is 28%.
Required - What is the deferred tax liability balance for Quigley at 30 June 2021?
A. $9,210.
B. $1,596.
C. $1,710.
D. $8,596.