On 30 June 2021, Donald Ltd prepared its first statement of comprehensive income and its first statement of financial position. The statements were prepared before considering taxation. Donald Ltd commenced operations on 1 July 2020. The following information was available on 30 June 2021

Statement of comprehensive income for the year ended 30 June 2021

Gross Profit	80,000
Accounting profit before tax	28,000
Long service leave Expenses	(10,000)
Wages expense	(40,000)
Rent expense	(15,000)
Depreciation expense- machinery	(6,000)
Bad debt expense	(5,000)

Assets and liabilities as shown in the statement of financial position

As at 30 June 2021

Assets
Machinery	42,000
Accumulated depreciation - machinery	(6,000)
Inventories	45,000
Prepaid rent	10,000
Cash	25,000
Accounts receivable	44,000
Provision for doubtful debt	(8,000)
Liabilities
Loan payable	35,000
Accounts payable	20,000
Revenue received in advance	10,000
Provision for long service leave	15,000

Additional information

• No bad debts were written off.
• The revenue received in advance is taxable income.
• The machinery was depreciated on a straight-line basis over 7 years for accounting purposes, but over 5years for taxation purposes. The machinery was not expected to have any residual value.
• All wages had been paid as at year end and were deductible for tax purposes.
• Rent was paid in advance on 1 July 2020. Actual amounts paid were allowed as a tax deduction.
• None of the long service leave expenses has actually been paid. It is not deductible for tax until it is actually paid.
• The company tax rate was assumed to be 30%.

Required:

1. Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2021.

Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts at 30 June2021.

Answer rating: 100% (QA)

my answer is as shown below 1Prepare the current tax worksheet and the journal entry to recognise cu... View the full answer