Reference no: EM132570835

Question - At 30 June 2019, Beta Ltd had the following deferred tax balances:

Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items:

Depreciation expense - plant

Doubtful debts expense $7,000

3,000 Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:

Tax depreciation - plant

Bad debts written off $8,000

2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies.

Required -

a) Find the taxable income and income tax payable for the year to 30 June 2020.

b) Find by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave.

c) Make the necessary journal entries to account for income tax assuming recognition criteria are satisfied.

d) Find the balances of the deferred tax liability and deferred tax asset at 30 June 2020?