Prepare the relevant journal entry to account, Cost Accounting

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The following information is provided to you concerning Lydia Ltd as at 30 June 2012.  Assume a company tax rate of 30%.

(i) The balance of rent received in advance in the balance sheet as at 30 June 2012 amounted to $3 500.

(ii) Non current assets in the balance sheet as at 30 June 2012 included machinery with an original cost of $37 500 and accumulated depreciation amounting $10 000.  For taxation purposes the asset has a net value (after accumulated tax depreciation) of $22 500.

Required

For each of the above:

(i)  Using the appropriate formula per AASB 112, calculate the relevant tax base.

(ii) Prepare the relevant journal entry to account for any future tax consequences assuming the carrying amount in the balance sheet is not the same as the tax base for the corresponding asset or liability


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