The following are all independent situations. Prepare the journal entries for deferred tax on the creation or
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1. The entity has an allowance for doubtful debts of $10 000 at the end of the current year relating to accounts receivable of $125 000. The prior year balances for these accounts were $8500 and $97 500respectively. During the current year, debts worth $9250 were written off as uncollectable.
2. The entity sold a vehicle at the end of the current year for $15 000. The vehicle cost $100 000 when purchased 3 years ago, and had a carrying amount of $25 000 when sold. The taxation depreciation rate for equipment of this type is 33%.
3. The entity has recognised an interest receivable asset with a beginning balance of $17 000 and an ending balance of $19 500 for the current year. During the year, interest of $127 000 was received in cash.
4. At the end of the current year, the entity has recognised a liability of $4000 in respect of outstanding fines for non-compliance with safety legislation. Such fines are not tax-deductible.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Related Book For
Applying International Financial Reporting Standards
ISBN: 978-0730302124
3rd edition
Authors: Keith Alfredson, Ken Leo, Ruth Picker, Paul Pacter, Jennie Radford Victoria Wise
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