Camelia Ltd reported $150,000 of profit before tax in the statement of comprehensive income for the year
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Question:
Camelia Ltd reported $150,000 of profit before tax in the statement of comprehensive income for the year ended 30 June 2021, including the following revenue and expense items.
Depreciation expense – machinery | $14,000 |
Depreciation expense – building (non-deductible) | 3,000 |
Entertainment costs (non-deductible) | 4,000 |
Warranty expense | 5,000 |
Annual leave expense | 12,000 |
Bad debts expense | 20,000 |
Rent revenue | 15,000 |
Additional information
- Depreciation of machinery for tax purposes for the year ended 30 June 2021 amounted to $15,000.
- Bad debts written off $8,000.
- Annual leave paid $5,000.
- Warranty expense paid $3,000.
- The tax rate is 30%.
Required:
- Compute the taxable income or loss. (using excel spreadsheet).
- Prepare the journal entry to recognize the company’s current tax liability as at 30 June 2021. (using excel spreadsheet).
Expert Answer:
Working notes Calculation of Taxable income Pretax accounting income Permanent ... View the full answer
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