A company has prepared its adjusted trial balance for the year ended 30 June 2022. It has yet to determine its income tax expense for the year and the tax assets and liabilities that arise from the transactions and events of the year. The following tables provide relevant information from the adjusted trial balance:

TABLE 1

	2022
Accounting profit	568,000
Rent revenue	161,700
Interest revenue	69,300
Warranty claims expense	95,700
Doubtful debts expense	13,860
Depreciation expense - Plant	198,000
Workshop supplies expense	75,240
Political donations expense	15,000

TABLE 2

	2022	2021
Cash	29,700	253,440
Accounts receivable	273,900	253,440
Allowance for doubtful debts	(16,500)	(10,560)
Inventories	221,430	192,390
Interest receivable	11,550	4,950
Workshop supplies	7,920	9,240
Plant	990,000	990,000
Accumulated depreciation - Machinery	(396,000)	(198,000)
Deferred tax asset		71,181
Goodwill	290,400	290,400
Accounts payable	238,260	246,840
Unearned rent revenue	9,240	12,210
Provision for warranty claims	144,210	115,500
Deferred tax liability		4,257

Additional information:

• Political donations are not deductible for tax purposes
• Machinery assets are depreciated using straight-line at 20% p.a. with no residual
• Machinery – tax depreciation rate is 10% p.a., straight-line with no residual
• The tax rate is 30%

Prepare the current tax worksheet to calculate the current tax liability for the year ended 30 June 2042.

Prepare the deferred tax worksheet to calculate the movements in deferred tax accounts for the year ended 30 June 2042.

Provide the journal entries that arise from these tax worksheets

Answer rating: 100% (QA)

Answer Machinery cost as per Bs 000066 Depreciation as per accounting 20 SLM basis For taxation purp... View the full answer