Prepare current tax worksheet (10 MARKS)

You have been asked by the management of ABC Ltd to assist with the preparation of the income tax entries for the year ended 30 June 2020. The company reported a profit before tax for the year to 30 June 2020 of $900000.

Additional information

(a) Interest revenue of $10000 is included in the profit for the year to 30 June 2020; and the total amount of cash interest received this year is $20 000.

(b) Expenses included in profit for the year to 30 June 2020 are as follows:

depreciation expense for plant $50000

doubtful debts expense $25000; the bad debt written-off is $15 000 this year.

warranty expense $36000; the warranty paid is 50 000 in the current period.

(c) Accumulated depreciation on plant for tax purposes is $300000 on 30 June 2020 and $150000 on 30 June 2019. There have been no acquisitions or disposals of plant during the current year.

(d) The corporate tax rate is 30%.

Required

Complete the current tax worksheets of ABC Ltd and prepare the tax entries for 30 June 2020.