Profit before tax for ABC Ltd for the year to 30 June 2019 is as follows:...

Transcribed Image Text:

Profit before tax for ABC Ltd for the year to 30 June 2019 is as follows: in (000's) Additional information: $60 allowed as a tax deduction for depreciation of plant. Interest has not yet been received. Bad debts of $20 were written off during the year. Sales revenue 1,000 Interest revenue 40 Government grant 80 Payments of $30 were made to employees in relation to annual leave taken during the year. COGS (450) Depreciation expense (plant) (50) The tax rate is 30% Required: Calculate the current tax liability of ABC Ltd as at 30 June 2019 and prepare the required journal entry. Goodwill impairment (20) Bad debts expense (30) Annual leave expense (10) Other expenses (260) Profit before income tax 300 Accounting profit Add: A/C Depreciation – Plant Goodwill Impairment Bad debts expense Annual Leave expense Deduct: Interest Revenue Government Grant Tax Depreciation Plant Bad debts written off Annual leave paid Taxable income Current tax liability @ 30% Profit before tax for ABC Ltd for the year to 30 June 2019 is as follows: in (000's) Additional information: $60 allowed as a tax deduction for depreciation of plant. Interest has not yet been received. Bad debts of $20 were written off during the year. Sales revenue 1,000 Interest revenue 40 Government grant 80 Payments of $30 were made to employees in relation to annual leave taken during the year. COGS (450) Depreciation expense (plant) (50) The tax rate is 30% Required: Calculate the current tax liability of ABC Ltd as at 30 June 2019 and prepare the required journal entry. Goodwill impairment (20) Bad debts expense (30) Annual leave expense (10) Other expenses (260) Profit before income tax 300 Accounting profit Add: A/C Depreciation – Plant Goodwill Impairment Bad debts expense Annual Leave expense Deduct: Interest Revenue Government Grant Tax Depreciation Plant Bad debts written off Annual leave paid Taxable income Current tax liability @ 30%

Answer rating: 100% (QA)

Explanation is given against each line item for its treatment Calculation of ... View the full answer