Plantation Ltd commenced business on 1 July 2022 with share capital of $562 000. The company purchased
Question:
Plantation Ltd commenced business on 1 July 2022 with share capital of $562 000. The company purchased some non-current assets on that date. The details of the non-current asset purchases are as follows:
| Machinery | Vehicles |
Cost | $400 000 | $75 000 |
Depreciation rate: |
|
|
Accounting | 20% | 25% |
Tax | 15% | 50% |
Method | Straight line | Straight line |
The statement of comprehensive income and statement of financial position for Plantation Ltd at year end were as follows:
Plantation Ltd
Statement of Comprehensive Income
for the year ended 30 June 2023
| $ | $ |
Revenues |
| 500 000 |
Expenses |
|
|
Cost of sales | 175 000 |
|
Depreciation on machinery | 80 000 |
|
Depreciation on vehicles | 18 750 |
|
Salaries and wages | 125 000 |
|
Insurance | 10 000 |
|
Annual leave | 14 000 |
|
Rent of premises | 20 000 |
|
Other expenses | 17 250 | 460 000 |
Profit before income tax |
| 40 000 |
Plantation Ltd
Statement of Financial Position
as at 30 June 2023
Assets | $ | $ |
Cash |
| 50 000 |
Inventory |
| 150 000 |
Accounts receivable |
| 80 000 |
Prepaid insurance |
| 20 000 |
Machinery | 400 000 |
|
Less: Accumulated depreciation | 80 000 | 320 000 |
Vehicles | 75 000 |
|
Less: Accumulated depreciation | 18 750 | 56 250 |
|
| 676 250 |
Liabilities |
|
|
Accounts payable | 50 250 |
|
Rent payable | 10 000 |
|
Provision for annual leave | 14 000 | 74 250 |
Net assets |
| 602 000 |
Shareholders' equity |
|
|
Share capital |
| 562 000 |
Retained earnings |
| 40 000 |
|
| 602 000 |
Required - Calculation Questions
- Calculate the current tax liability for the year ended 30 June 2023.
- complete worksheet showing the deferred tax balances for the year ended 30 June 2023.
- show the relevant general journal entries to record deferred tax assets and liabilities at 30 June 2023.
- Prepare an extract from the statement of comprehensive income showing profit before tax, income tax expense and profit after tax for the year ended 30 June 2023.
- Prepare an extract from the statement of financial position showing any income tax assets and liabilities at 30 June 2023.
- Tax rate is 30%.
Intermediate Algebra
ISBN: 9780134895987
13th Edition
Authors: Margaret Lial, John Hornsby, Terry McGinnis