Q1) At 30 June 2019, Beta ltd had the following deferred tax balance: Deferred tax liability $18,000 Deferred tax asset $15,000 Beta ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense-plant $7,000 Doubtful debts expense $3,000 Long-service leave expense $4,000 For taxation purpose the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation-plant $8,000 Bad debts written off $2,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: (a) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. (b) What are the balances of deferred tax liability and deferred tax asset at 30 June 2020?
Q1) 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) Prepare the necessary
(b) What are the balances of deferred tax liability and deferred tax asset at 30 June 2020?
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