Reference no: EM132470227
As reported in the statement of comprehensive income of Wonderland Ltd (a manufacture company) for the year ended 30 June 2019: The profit before tax amounted to: $20,830,000 and included the following revenue and expense items:
Rent revenue $650,000
Government grant received $1,171,000
Doubtful debts expense $130,000
Depreciation (Plant) $846,200
Depreciation (Buildings) $208,000
Warranty expense $585,000 A
nnual leave expense $390,000
Insurance expense $195,000
Entertainment expense $325,400
The draft statements of financial position of the company at 30 June 2019 and 2018 showed the following assets and liabilities:
2019 ($) 2018 ($)
Assets Cash $1,366,000 $1,497,000
Inventory $2,929,000 $2,668,000
Accounts receivable $8,462,000 $8,071,000
Allowance for doubtful debts -$676,000 -$624,000
Prepaid insurance policy $364,000 $338,000
Plant $8,462,000 $8,462,000
Accumulated depreciation - Plant -$3,384,800 -$2,538,600
Buildings $5,207,000 $5,207,000
Accumulated depreciation - Buildings -$2,083,000 -$1,874,000
Land $3,254,000 $3,254,000
Goodwill (net) $1,301,000 $1,301,000
Deferred Tax Asset ? $192,810
Liabilities Accounts payable $4,947,000 $4,426,000
Provision for warranty $1,041,000 $781,000
Annual leave payable $716,000 $520,000
Rent received in advance $455,000 $325,000
Deferred Tax Liability ? $0
Additional Information:
- Rent revenue is tax assessable when it is received in cash Government grant is not tax assessable Doubtful debts are tax deductible when the company actually incurs bad debts/write offs For accounting purposes, plant is depreciated using the straight line method at a rate of: 10% per annum For tax purposes, however, plant is depreciated at a rate of: 15% per annum Depreciation of buildings and entertainment expense are not allowed as tax deductions Employee entitlements including annual leave are tax deductible when they are paid in cash to the employees Insurance expense is tax deductible when it is paid in cash Warranty expense is tax deductible when it is paid in cash Aggregated turnover for the years ended 30 June 2018 and 2019 is in excess of $25 million and it is expected that turnover will exceed $50 million in the year ended 30 June 2020
Question 1: Calculating DTA_DTL 2019 calculate the Deferred Tax Asset and Deferred Tax Liability balances as at 30th June 2019 - show all relevant workings. deferred tax journal entry for the year ended 30th June 2019.