KB Ltd purchased a machine on 1 July 2014 for $320,000. The machine is expected to have a useful life of 4 years (straight-line basis) and no residual value. The ATO allows the company to depreciate the asset over 5 years for taxation purposes. The profit before tax for the company for the year ending 30 June 2015 is $500,000. The tax rate is 30%.

Required:

1. Calculate the company's taxable profit and hence its tax payable for 2015. (3 marks)

ANSWER a: (answer box will enlarge as you enter your response)

1. Determine the deferred tax liability or deferred tax asset that will result. (3 marks)

ANSWER b:

Prepare the necessary journal entries on 30 June 2015.