Tiger is a cleaning and packaging supplies company. It started its business on 1 July 2015....

 

Transcribed Image Text:

Tiger is a cleaning and packaging supplies company. It started its business on 1 July 2015. The income statement for the year ended 30 June 2019 and the extract of the statements of financial position of Tiger Ltd for the year ended 30 June 2019 and 30 June 2020 are provided below. The income statement reports a profit before tax of $1,174,955 for the year ended 30 June 2020. The Income Statement for the year ended 30 June 2020 Revenue 1,635,900 Sales Revenue Service Revenue 1,505,800 101,340 28,760 Government Grant Expenses Administration expenses Wages Long service-leave Interest Expense Bad debt expense 45,180 84,600 84,252 59,124 15,168 81,250 40,000 Depreciation expenses - Equipment Depreciation expenses- Building Entertainment Expense Impairment of goodwill Insurance expense 7,646 13,569 30,156 460,945 Accounting profit before tax 1,174,955 The Statement of Financial Position as at 30 June 2019 and 30 June 2020 2020 2019 Assets Cash 48,750 54,250 71,500 Inventory Accounts Receivable 57,750 65,800 79,500 52,700 Less allowance for doubtful debts Prepaid Insurance Equipment - cost Less accumulated depreciation Building - cost Less accumulated depreciation 33,800 26,800 4,850 32,000 3,553 650,000 243,750 400,000 200,000 650,000 406,250 162,500 400,000 200,000 160,000 485,500 240,000 458,000 4,588 1,210.488 325,000 18,360 1,256 363 Land Goodwill Total Assets The Statement of Financial Position as at 30 June 2019 and 30 June 2020 (con'd) Liabilities Account Payable 47,000 36,500 25,000 48,520 35,690 22,520 18,240 28,540 Accrued Interests Accrued Wages Unearned service revenue Provision for long service leave Loan payable 14,200 16,200 94,500 94,500 248,010 962,478 233.400 1.022.963 Total liabilities Net Assets Additional Information: 1. Unearned service revenue recognised during the year has amounted to $101,340. Income is taxed when cash is received. The cost of the equipment is $650,000. Taxation office generally allows this type of asset to be depreciated over 5 years. Tiger Ltd acquired a parcel of land at the cost of $325,000 on 1 July, 2017. The land was revalued to its fair value of $458,000 as at 30 June 2020. All administration expenses incurred for the year were fully paid at 30 June 2019 and 30 2. 3. 4. June 2020. Actual amount paid on insurance is allowable for deduction. Interest expenses and salaries expense are allowed for deduction only when they are paid. 7. Impairment of goodwill and depreciation of building are not allowable for deduction. Entertainment expenses are non-allowable deduction under tax purpose. Government grant is an exempt income under tax purpose. 10. Deferred tax asset balance for the year ended 30 June 2019 is amounted to $34,500. 11. Amounts received from sales, including those on credit terms, are taxed at the time the 5. 6. 8. 9. sale is made. 12. The tax rate was 30% for the year ended 30 June 2020. Required A. Prepare a tax reconciliation to calculate current tax liability for the year ended 30 June 2020. Your Answer Answer of Requirement (A) Current Tax Worksheet for the year ended 30 June 2020 Accounting profit for the year Taxable income for the year Current tax liability for the year Tiger is a cleaning and packaging supplies company. It started its business on 1 July 2015. The income statement for the year ended 30 June 2019 and the extract of the statements of financial position of Tiger Ltd for the year ended 30 June 2019 and 30 June 2020 are provided below. The income statement reports a profit before tax of $1,174,955 for the year ended 30 June 2020. The Income Statement for the year ended 30 June 2020 Revenue 1,635,900 Sales Revenue Service Revenue 1,505,800 101,340 28,760 Government Grant Expenses Administration expenses Wages Long service-leave Interest Expense Bad debt expense 45,180 84,600 84,252 59,124 15,168 81,250 40,000 Depreciation expenses - Equipment Depreciation expenses- Building Entertainment Expense Impairment of goodwill Insurance expense 7,646 13,569 30,156 460,945 Accounting profit before tax 1,174,955 The Statement of Financial Position as at 30 June 2019 and 30 June 2020 2020 2019 Assets Cash 48,750 54,250 71,500 Inventory Accounts Receivable 57,750 65,800 79,500 52,700 Less allowance for doubtful debts Prepaid Insurance Equipment - cost Less accumulated depreciation Building - cost Less accumulated depreciation 33,800 26,800 4,850 32,000 3,553 650,000 243,750 400,000 200,000 650,000 406,250 162,500 400,000 200,000 160,000 485,500 240,000 458,000 4,588 1,210.488 325,000 18,360 1,256 363 Land Goodwill Total Assets The Statement of Financial Position as at 30 June 2019 and 30 June 2020 (con'd) Liabilities Account Payable 47,000 36,500 25,000 48,520 35,690 22,520 18,240 28,540 Accrued Interests Accrued Wages Unearned service revenue Provision for long service leave Loan payable 14,200 16,200 94,500 94,500 248,010 962,478 233.400 1.022.963 Total liabilities Net Assets Additional Information: 1. Unearned service revenue recognised during the year has amounted to $101,340. Income is taxed when cash is received. The cost of the equipment is $650,000. Taxation office generally allows this type of asset to be depreciated over 5 years. Tiger Ltd acquired a parcel of land at the cost of $325,000 on 1 July, 2017. The land was revalued to its fair value of $458,000 as at 30 June 2020. All administration expenses incurred for the year were fully paid at 30 June 2019 and 30 2. 3. 4. June 2020. Actual amount paid on insurance is allowable for deduction. Interest expenses and salaries expense are allowed for deduction only when they are paid. 7. Impairment of goodwill and depreciation of building are not allowable for deduction. Entertainment expenses are non-allowable deduction under tax purpose. Government grant is an exempt income under tax purpose. 10. Deferred tax asset balance for the year ended 30 June 2019 is amounted to $34,500. 11. Amounts received from sales, including those on credit terms, are taxed at the time the 5. 6. 8. 9. sale is made. 12. The tax rate was 30% for the year ended 30 June 2020. Required A. Prepare a tax reconciliation to calculate current tax liability for the year ended 30 June 2020. Your Answer Answer of Requirement (A) Current Tax Worksheet for the year ended 30 June 2020 Accounting profit for the year Taxable income for the year Current tax liability for the year

Answer rating: 100% (QA)

Q3 Accounting profit before tax 1174955 Add Depreciation of equipment 81250 Depreciat... View the full answer