Reference no: EM133147228
Question - The profit before tax, as reported in the statement of profit and loss for Albury Ltd for the year ended 30 June 2024, amounted to $400,000, including the following revenue and expense items.
|
Government grant
|
$200,000
|
|
Interest revenue
|
200,000
|
|
Rent revenue
|
45,000
|
|
Bad debts expense
|
40,000
|
|
Depreciation expense - equipment
|
30,000
|
|
Depreciation expense - plant
|
80,000
|
|
Wages expense
|
480,000
|
|
Long service leave expense
|
80,000
|
The draft statements of financial position of Albury Ltd at 30 June 2023 and 30 June 2024 showed the following assets and liabilities.
|
2023
|
2024
|
|
Assets
|
|
|
|
Cash
|
$120, 000
|
$120,000
|
|
Inventories
|
400,000
|
600,000
|
|
Accounts receivable
|
200,000
|
280,000
|
|
Allowance for doubtful debts
|
(20,000)
|
(40,000)
|
|
Interest receivable
|
100,000
|
80,000
|
|
Equipment
|
120,000
|
120,000
|
|
Accumulated depreciation - equipment
|
(60,000)
|
(90,000)
|
|
Plant
|
800,000
|
800,000
|
|
Accumulated depreciation - plant
|
(160,000)
|
(240,000)
|
|
Goodwill
|
60,000
|
60,000
|
|
Deferred tax asset
|
132,000
|
|
|
Liabilities
|
|
|
|
Accounts payable
|
240,000
|
160,000
|
|
Wages payable
|
200,000
|
320,000
|
|
Rent revenue received in advance
|
20,000
|
60,000
|
|
Loan payable
|
800,000
|
400,000
|
|
Provision for long service leave
|
160,000
|
120,000
|
|
Deferred tax liability
|
96,000
|
|
Additional information
In the year ended 30 June 2023, Albury Ltd had a tax loss of $260,000.
Plant is depreciated on a straight-line basis over 10 years for accounting purposes, but over 5 years for taxation purposes.
Equipment is depreciated on a straight-line basis over 4 years for accounting purposes, but over 3 years for taxation purposes.
The company tax rate is assumed to be 30% for the year ended 30 June 2024.
Required -
1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2024.
2. Prepare the deferred tax worksheet and journal entry to recognise deferred tax and adjust the deferred tax accounts at 30 June 2024.
3. Calculate the total for Income Tax Expense that Albury Ltd will need to report in the Statement of Profit or Loss and Other Comprehensive Income for the period 30 June 2024.