From the following information relating to Swintopia Ltd at June 30, 2022 prepare all the necessary...

 

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From the following information relating to Swintopia Ltd at June 30, 2022 prepare all the necessary entries for tax effect accounting: Swintopia reported a net profit before income tax of $870,000 for the year. The net profit was determined after charging the following items: • Entertainment expenses • Depreciation on Buildings • Allowance for doubtful debts • Increase in the provision for Annual leave Depreciation on Vehicles $20,000 • Goodwill impairment Assets Cash at Bank Accounts Receivable Buildings An extract of the Statement of Financial Position as at June 30, 2022 for accounting and tax purposes appears as follows: 550.000 Less accumulated depreciation 15.000 Motor Vehicles 90.000 Less accumulated depreciation 20.000 Liabilities Accounts payable Provision for Annual leave Motor Vehicle Lease Net Assets Additional Information: $15,000 Carrying Amt 85,000 63.000 565,000 $5,000 $15,000 $9,000 753.000 90,000 70,000 25,000 35,000 4,000 45,000 84.000 669,000 550,000 Tax Base 85.000 68,000 550,000 65,000 768,000 35,000 0 45.000 80.000 $12,000 685,000 • Depreciation on buildings is to be regarded as a permanent difference • Depreciation on Motor vehicles for taxation purposes is $25,000 • Entertainment expenses are not an allowable deduction; • A bad debt of $4,000 from the previous financial year has been written off and can now be claimed as a tax deduction. (this is written off against the provision) • Annual leave paid during the year was $8,000 1. Schedule to calculate taxable income (5 marks) Accounting Profit before tax - taxable income $$ add non-deductible expenses less allowable deductions 2. Calculate temporary differences (3 marks) Temporary Differences Temporary Differences Carrying Amt Tax Base TTD Assets Liabilities Taxable Income Net Assets DTD CATB TB - CA TBCA CA - TB 3. GENERAL JOURNAL OF Swintopia LTD (4 marks) DATE DETAILS DR CR 30/6/2022 4. Reconciliation of pre-tax profit to taxable income (4 marks) Reconciliation +/- permanent differences +/- temporary differences Taxable Income 5a. What is the objective of Accounting standard AASB112? (2 marks) 5b. Why is there a difference between accounting profit and taxable income? (2 marks) Department Details Template Details Author: Sue Rollnik Author: VE Quality and Policy Date created: Date created: 07 December 2018 Date last updated: 9/8/2021 Date last updated: 21 December 2018 File name: FNSACC514 Prepare financial reports for Corporate Entities $2 2021 Location: VE Staff Wiki/Quality/Quality Life Cycle/Plan Version: 1.1 Version: Page 4 of From the following information relating to Swintopia Ltd at June 30, 2022 prepare all the necessary entries for tax effect accounting: Swintopia reported a net profit before income tax of $870,000 for the year. The net profit was determined after charging the following items: • Entertainment expenses • Depreciation on Buildings • Allowance for doubtful debts • Increase in the provision for Annual leave Depreciation on Vehicles $20,000 • Goodwill impairment Assets Cash at Bank Accounts Receivable Buildings An extract of the Statement of Financial Position as at June 30, 2022 for accounting and tax purposes appears as follows: 550.000 Less accumulated depreciation 15.000 Motor Vehicles 90.000 Less accumulated depreciation 20.000 Liabilities Accounts payable Provision for Annual leave Motor Vehicle Lease Net Assets Additional Information: $15,000 Carrying Amt 85,000 63.000 565,000 $5,000 $15,000 $9,000 753.000 90,000 70,000 25,000 35,000 4,000 45,000 84.000 669,000 550,000 Tax Base 85.000 68,000 550,000 65,000 768,000 35,000 0 45.000 80.000 $12,000 685,000 • Depreciation on buildings is to be regarded as a permanent difference • Depreciation on Motor vehicles for taxation purposes is $25,000 • Entertainment expenses are not an allowable deduction; • A bad debt of $4,000 from the previous financial year has been written off and can now be claimed as a tax deduction. (this is written off against the provision) • Annual leave paid during the year was $8,000 1. Schedule to calculate taxable income (5 marks) Accounting Profit before tax - taxable income $$ add non-deductible expenses less allowable deductions 2. Calculate temporary differences (3 marks) Temporary Differences Temporary Differences Carrying Amt Tax Base TTD Assets Liabilities Taxable Income Net Assets DTD CATB TB - CA TBCA CA - TB 3. GENERAL JOURNAL OF Swintopia LTD (4 marks) DATE DETAILS DR CR 30/6/2022 4. Reconciliation of pre-tax profit to taxable income (4 marks) Reconciliation +/- permanent differences +/- temporary differences Taxable Income 5a. What is the objective of Accounting standard AASB112? (2 marks) 5b. Why is there a difference between accounting profit and taxable income? (2 marks) Department Details Template Details Author: Sue Rollnik Author: VE Quality and Policy Date created: Date created: 07 December 2018 Date last updated: 9/8/2021 Date last updated: 21 December 2018 File name: FNSACC514 Prepare financial reports for Corporate Entities $2 2021 Location: VE Staff Wiki/Quality/Quality Life Cycle/Plan Version: 1.1 Version: Page 4 of

Answer rating: 100% (QA)

Answer Calculation temporary difference Temporary Difference Carrying Amount Tax Base TTD DTD Assets CATB TBCA Depreciation on building 15000 15000 Al... View the full answer