. Fanporary differences at period end tevable Town Ltd commences operations on 1 July 2020. One year after the commencement of its operations (30 June 2021) the entity prepares the following information, showing both the carrying amounts for accounting purposes and the tax bases of the respective assets and liabilities. Carrying values (8) Tax bases (8) Assets Accounts receivable (net) 45 000 60 000 Prepaid insurance 16 000 Inventory 35 000 35 000 Plant net 444 000 370 000 Land 600.000 600.000 Liabilities Accounts payable 55 000 55 000 Provision for warranty 18 000 Loan payable 250 000 250 000 Other information Accounting profit for Town Ltd for the year ending 30 June 2021 was $710 000. Doubtful debts expense for the year was $15 000 and no debts have been written off. Insurance expense for the year was $6 000, None of the amounts accrued in respect of warranty expenses has actually been paid. . An item of plant is purchased at a cost of $555 000 on 1 July 2020. For accounting purposes it is expected to have a life of five years; however, for taxation purposes it can be depreciated over three years. It is not expected to have any residual value. The tax rate is 30 per cent, Required: (a) Complete the following table to determine current tax consequences (i.e. tax expense and tax payable) for the year ending 30 June 2021. Calculation of current tax 30 June consequences for year 2021 ending: $'000 $'000 $'000 Accounting profit before tax Tax expense: Temporary differences: I Page 5 of 8 Tax Taxable profit payable: (b) Complete the following tax effect worksheet and prepare journal entries for current and deferred tax consequences for the year ending 30 June 2021. Tax worksheet for Town Ltd at 30 June 2021 Carrying Tax Base Deductible Taxable Tax Current ($ 000) Amount Temporary Expense Tax Differences Difference Payable $ $ $ Assets HOSTES Acc rec (net) . 45 60: Prepaid 16 0 insurance Inventory 35 35 Plant (net) 444 370 ... Land 600 600 ...... *** Accounts 55 55 18 0 ................. Loan payable 250 250 ....... Less: Prior period amounts Movement for the period Tax affected @ 30% Income tax adjustments required Temporary S Liabilities payable ......... Prov. warranty Journals . Fanporary differences at period end tevable Town Ltd commences operations on 1 July 2020. One year after the commencement of its operations (30 June 2021) the entity prepares the following information, showing both the carrying amounts for accounting purposes and the tax bases of the respective assets and liabilities. Carrying values (8) Tax bases (8) Assets Accounts receivable (net) 45 000 60 000 Prepaid insurance 16 000 Inventory 35 000 35 000 Plant net 444 000 370 000 Land 600.000 600.000 Liabilities Accounts payable 55 000 55 000 Provision for warranty 18 000 Loan payable 250 000 250 000 Other information Accounting profit for Town Ltd for the year ending 30 June 2021 was $710 000. Doubtful debts expense for the year was $15 000 and no debts have been written off. Insurance expense for the year was $6 000, None of the amounts accrued in respect of warranty expenses has actually been paid. . An item of plant is purchased at a cost of $555 000 on 1 July 2020. For accounting purposes it is expected to have a life of five years; however, for taxation purposes it can be depreciated over three years. It is not expected to have any residual value. The tax rate is 30 per cent, Required: (a) Complete the following table to determine current tax consequences (i.e. tax expense and tax payable) for the year ending 30 June 2021. Calculation of current tax 30 June consequences for year 2021 ending: $'000 $'000 $'000 Accounting profit before tax Tax expense: Temporary differences: I Page 5 of 8 Tax Taxable profit payable: (b) Complete the following tax effect worksheet and prepare journal entries for current and deferred tax consequences for the year ending 30 June 2021. Tax worksheet for Town Ltd at 30 June 2021 Carrying Tax Base Deductible Taxable Tax Current ($ 000) Amount Temporary Expense Tax Differences Difference Payable $ $ $ Assets HOSTES Acc rec (net) . 45 60: Prepaid 16 0 insurance Inventory 35 35 Plant (net) 444 370 ... Land 600 600 ...... *** Accounts 55 55 18 0 ................. Loan payable 250 250 ....... Less: Prior period amounts Movement for the period Tax affected @ 30% Income tax adjustments required Temporary S Liabilities payable ......... Prov. warranty Journals