On 1 July 2014, Rich Ltd was incorporated. The accounting profit and other relevant information of Rich Ltd for the three years to 2017 are as follows:

The company tax rate is 30%.

Calculate the current and deferred tax of Rich Ltd for each year, 2015, 2016 and 2017, and prepare the required tax journal entries for each year.

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Profit before tax Warranty expense Depreciation expense - plant Gain on sale of plant for accounting Warranty paid Tax depreciation - plant Gain on sale of plant for tax Provision for warranty amount Provision for warranty - tax base Plant - carrying amount Plant - tax base carrying 2017 $1 800 000 20 000 22 000 250 000 30 000 52 000 2016 $1 500 000 20 000 250 000 30 000 250 000 60 000 40 000 2015 $1 200 000 500 000 20 000 - 30 000 500 000 80 000 70 000 Profit before tax Warranty expense Depreciation expense - plant Gain on sale of plant for accounting Warranty paid Tax depreciation - plant Gain on sale of plant for tax Provision for warranty amount Provision for warranty - tax base Plant - carrying amount Plant - tax base carrying 2017 $1 800 000 20 000 22 000 250 000 30 000 52 000 2016 $1 500 000 20 000 250 000 30 000 250 000 60 000 40 000 2015 $1 200 000 500 000 20 000 - 30 000 500 000 80 000 70 000

Answer rating: 100% (QA)

Current Tax Worksheet For the year ended 30 June 2015 Accounting profit 1 200 000 Add Warranty expense 500 000 Depreciation expense plant 20 000 520 0... View the full answer