The accounting profit before tax of She Said Ltd for the year ended 30 June 2017 was $24 000 and included the income and expense items shown below.

The statements of financial position of She Said Ltd as at 30 June 2017 and 2016 included the following assets and liabilities:

Additional information

? In March 2017, the company received an amended assessment from the ATO for the year ended 30 June 2016 indicating that an amount of $4500 claimed as a deduction for legal expenses had been disallowed. The company has not yet adjusted its accounts to reflect the amendment.

? For tax purposes the carrying amount of plant sold was $26 000. There were no other disposals or acquisitions of plant during the year.

? The tax deduction for plant depreciation was $28 800. Accumulated depreciation at 30 June 2016 for taxation purposes was $156 480.

? The tax rate is 30%.

A. Prepare the journal entry necessary to record the amended assessment of the company for 30 June 2016.

B. Prepare the current tax worksheet for the year ended 30 June 2017and the entries to record the current tax.

C. Explain your treatment of annual leave expense in the current tax worksheet.

D. Prepare the deferred tax worksheet as at 30 June 2017 and the entries to record the deferred tax.

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Goverment grant (exempt from tax) Proceeds on sale of plant Carrying amount of plant sold Entertainment expense Bad debts expense Depreciation expense - plant Insurance expense Annual leave expense $ 6A 5 360 33 000 30 000 12 100 5 200 24 000 11 900 15 400 SHE SAID LTD Statement of Financial Position (Extract) as at 30 June Accounts receivable Allowance for doubtful debts Prepaid insurance Plant - at cost Accumulated depreciation - plant Deferred tax asset Provision for annual leave Deferred tax liability 2017 $ 156 000 (6 800 3 400 240 000 (134 400 ) ? 14 100 ? ) 2016 $ 147 500 (5 200 5 600 290 000 (130 400 4 470 9 700 9 504 ) ) Goverment grant (exempt from tax) Proceeds on sale of plant Carrying amount of plant sold Entertainment expense Bad debts expense Depreciation expense - plant Insurance expense Annual leave expense $ 6A 5 360 33 000 30 000 12 100 5 200 24 000 11 900 15 400 SHE SAID LTD Statement of Financial Position (Extract) as at 30 June Accounts receivable Allowance for doubtful debts Prepaid insurance Plant - at cost Accumulated depreciation - plant Deferred tax asset Provision for annual leave Deferred tax liability 2017 $ 156 000 (6 800 3 400 240 000 (134 400 ) ? 14 100 ? ) 2016 $ 147 500 (5 200 5 600 290 000 (130 400 4 470 9 700 9 504 ) )

Answer rating: 100% (QA)

A Journal entry to record 2016 amendment assessment March 2017 Income tax expense Dr 1 350 Current tax liability Cr 1 350 Note the disallowed expense item increases the tax due for the year to 30 June ... View the full answer