On 1 July 2020, the company purchased furniture for its offices at a cost of $120,000. $60,000

Fantastic news! We've Found the answer you've been seeking!

Question:

On 1 July 2020, the company purchased furniture for its offices at a cost of $120,000. $60,000 of this purchase was paid in cash and the remainder was funded via a secured loan (repayable in 5 years) with their financiers. It is estimated that the furniture will have a useful life of 6 years with no residual value. For tax purposes the furniture has a useful life of 4 years. On 30 June 2021, a valuer determined that the fair value of the furniture was $110,000. Please provide journal entries for this transaction including narrations. You will need to include a table which shows any temporary differences in how/if you have calculated any deferred tax assets or liabilities.

Q2.

The company have received significant job keeper payments from the government during the 2021 financial year, for the retention of employees because of COVID-19. The government are looking at amending legislation and subsequently for companies to repay those amounts that they have received if they have not suffered a loss in profits of greater than 20% based on previous year's results. The company has performed better than expected during this time and has suffered losses of less than 15% based on its 2020 performance. The company have received $1,500,000 in job keeper payments over the last financial year. It is not yet known whether the new legislation will be passed. Provide a possible note to the accounts for this event identifying and applying the appropriate accounting standard that is relevant.

Q3

The company has revised its current supplier contracts for the upcoming financial year 2021. One area that has been renegotiated is in IT maintenance and support services for the head office of the case company. After several bids from several suppliers, the company has chosen to use the company Complete IT services Pty Ltd for the upcoming financial year for all of its IT maintenance and support needs. The contract for these services is estimated to cost the case company $750,000. The Chairman of the Board of your allocated case company owns a significant share (65%) of Complete IT Services Pty Ltd. Does this transaction need to be disclosed in the accounts of the company, discuss? If so, provide a note that could be used in the upcoming annual report (2021) for this event.