I have a Question, How do i get part a journal entries, Income tax expense for (25580) and deferred tax asset for (3750) --> under the current tax worksheet page 3. Page 3 & 4 are the solutions.

ACCT 20002 INTERMEDIATE FINANCIAL ACCOUNTING TUTORIAL IN-CLASS EXERCISES W Question Kilcoy Ltd has determined its accounting profit before tax for the year ended 30 June 2017 to be $256 700. Included in this prot are the items of revenue and expense shown below. Royalty revenue (non-taxable exempt $ 8 000 income) Proceeds on sale of building 75 000 Entertainment expense 1 700 Depreciation expense buildings 7 600 Depreciation expense plant 22 500 Carrying amount of building sold 70 000 Doubtful debts expense 4 100 Annual leave expense 46 000 Insurance expense 4 200 Development expense 15 000 The company's draft statement of nancial position at 30 June 2017 showed the following assets and liabilities: Assets Cash 35 2 500 Accounts receivable $ 21 500 Less: Allowance for doubtful debts [4 1001 17 400 Inventories 31 600 Prepaid insurance 4 500 Land 75 000 Buildings 170 000 Less: Accumulated depreciation [59 5001 110 500 Plant 150 000 Less: Accumulated depreciation [67 509! 82 50.0 Deferred tax asset (opening balance) 9 600 m Liabilities Accounts payable 25 000 Provision for annual leave 10 00.0 Deferred tax liability (opening balance) 6 000 Loan 140 000 33% Additionoi information (a) Quarterly income tax instalments paid during the year were: 28 October 2016 $18 000 28 January 2017 17 500 28 April 2017 18 000 with the final balance due on 28 July 2017. (b) The tax depreciation rate for plant (which cost $150 000 3 years ago) is 20%. Depreciation on buildings is not deductible for taxation purposes. (c) The building sold during the year had cost $100 000 when acquired 6 years ago. The company depreciates buildings at 5% p.a., straight-line. Any gain (loss) on sale of buildings is not taxable (i.e. not deductible). (d) During the year, the following cash amounts were paid: Annual leave $52 000 Insurance 3 700 (e) Bad debts of $3500 were written off against the allowance for doubtful debts during the year. (f) The $15 000 spent (and expensed) on development during the year is not deductible for tax purposes until 30 June 2018. (g) Kilcoy Ltd has tax losses amounting to $12 500 carried forward from prior years. (h) The company tax rate is 30%. Required 1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2017. 2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts. Kilcoy Ltd Current Tax Worksheet (for ear ended 30 June 2017) Accounting prot Add: Entertainment expense (nondeductible) Depreciation ~ buildings (non-deductible) Depreciation w plant insurance expense Development expenditure Doubtful debts expense Annual leave expense Deduct: Royalty revenue (tax exempt) Bad debts written off Annual leave paid Insurance paid Depreciation .1 plant (tax) Gain ~ Sale of buildings (non-assessable) (102 200) Taxable income 255 600 Add back exempt income 8 000 263 600 Tax loss recoaped (12 500) Taxable income 251 100 Tax payable @ 30% 75 330 Less quarterly tax paid (53 500) Current tax liabilit 21 830 Workings: Depreciation of plant for tax purposes: $150 000 x 20% = $30 000. Accumulated depreciation for tax purposes is $30 000 x 3 = $90 000. The entry to recognise current tax is: income Tax Expense (current) Dr 25 580 Current Tax Liability Cr 21 830 Deferred Tax Asset Cr 3 750 Kileoy Ltd Deferred tax worksheet Carrying Deductible Tax Base Taxable Deductible ----- Differences Differences $ $ $ $ 55 Relevant Assets Receivables Prepaid insurance B uildin gs Plant Development expenditure Relevant Liabilities Annual leave Total Temporary 29 100 Differences Exempt differences Temporary Differences Deferred tax liability Deferred tax asset Beginning balances Movements during the year Adjustment The entry to adjust deferred tax accounts is: Deferred Tax Asset Dr 2 880 Deferred Tax Liability Cr 2 100 Income Tax Income Cr 780