a) Determine the taxable income and income tax payable for the year to 30 June 2020. b) Determine 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) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020?
At 30 June 2019, Beta Ltd had the following
Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the
following items:
Doubtful debts expense 3,000
Long-service leave expense 4,000
For
Tax depreciation – plant $8,000
Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate
of 30% applies.
Required:
a) Determine the taxable income and income tax payable for the year to 30 June 2020.
b) Determine 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) Prepare the necessary
satisfied.
d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020?
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