Question 1

Question 2

(4 points) An extract from the records of a company discloses: Tax Base Carrying amount 15000 12000 Plant and machinery (net) Accounts receivable 8000 8000 Required: Prepare the genera/ journal entry to record the temporary difference assuming the tax rate is 30%. (8 points) Netloss before taxation is $7900. Anumber ofitems in the profit and loss account have to be treated differently for taxation purposes. Details are Accounting records Taxation records 9000 Nil 10000 Nil Entertainment expenses Transfer to doubtful debts allowance Depreciation of machinery Transfer to long service leave provision 11000 16500 6000 Nil Tax base Carrying amount 44000 44000 Assets Plant and machinery - at cost Accumulated depreciation (11000) (16500) 27500 33000 36000 42000 Accounts receivable (net) Liabilities 6000 Provision for long service leave 6000 Nill Nil Additional information 1. An amount of $4000 for a bad debt written off has been charged against the allowance for doubtful debts. This can now be claimed as a taxation deduction. 2. Income tax rate is 30%. 3. PAYG instalments already remitted to the ATO are $1500. Required: a) Prepare a statement of taxable income. b) Prepare all necessary general journal entries to record income tax expense and the temporary differences