Question 2 (22 marks) Corona Lid comunences operation on 1 July 2019 and you have obtained the following inlocation: 8. Provision for warranty expenses represcat warranty expense accrued and at year end Actual warranty expenses paid during the year was $5.000. Warranty expense is deductible for tax purposes when paid 9. For the year ended 30th June 2020 the taxable profit (after all adjustments to accounting prolit) was $295,000 Extract from internal statement of financial position as nt 30 June 2020 (prior to recording year-end tax cotries) 10. The tak nie is 30 percent. Required: a) Prepare the deferred tax worksheet for Corona Lid for the year ended provided below June 2020 is marks) Assets Cash Marketable Securities Inventory Interest Receivable Accounts Receivables (net) Buildings at Cast Plant and equipeci (ncl) Total assets Liabilities Accounts Payables Provision for warranty expenses Loan payable Total liabilities Net assets 193,000 5,000 164,000 7,000 120,000 1.265.000 600.000 52.354,000 b) Prepare the applicable journal entries al 30 June 2020 to recognize the tax adjus.ments determined in the deferred tax worksheet. (5 marks) c) How would your answer differ if Cocina Laackiped the revaluation mxlel and at 30 June 2020 revalued Buildings upward by $100,000. Note that revalution ndjustments recognised under AASB 116 Propeily, Plant and Equipment are not asscasable on deductible for tax purpuses. 19 marks) 280,00 40,000 298,000 S618,000 S1.736,000 Other information: 1. The tax written down value of the plant and equipment at .30) June 2020 was $540,000 2. The Marketable government securities are reported in the statement of financinl position at their fair value with any gains and losses being recognised in profit or loss. Thic cost of the Marketable govemment securities al acquisition was $2,000). Any gains and losses are taxed when the investment is sold. At the 30 June 2020 the unrealised gains is S3,000 3. Trade receivables are net of $6,000 in provision for doubtful debes 4. There were no bad debt write-offs during the year. Ouly lad debts written off are allowed as deductibles for tax purposes. 5. Amounts received from sales, including those in credit terms, are taxed at the time the snle is made 6. All administration and salary cxpenses incurred have been paid. Administration and salary expenses are deductible fue lax purposes when paid. 7. Interest receivable represent interest revenue received in advance. Interest income is assessable for tax purposes when received Page 5 of 12 Page 6 of 12 Question 2 (22 marks) Corona Lid comunences operation on 1 July 2019 and you have obtained the following inlocation: 8. Provision for warranty expenses represcat warranty expense accrued and at year end Actual warranty expenses paid during the year was $5.000. Warranty expense is deductible for tax purposes when paid 9. For the year ended 30th June 2020 the taxable profit (after all adjustments to accounting prolit) was $295,000 Extract from internal statement of financial position as nt 30 June 2020 (prior to recording year-end tax cotries) 10. The tak nie is 30 percent. Required: a) Prepare the deferred tax worksheet for Corona Lid for the year ended provided below June 2020 is marks) Assets Cash Marketable Securities Inventory Interest Receivable Accounts Receivables (net) Buildings at Cast Plant and equipeci (ncl) Total assets Liabilities Accounts Payables Provision for warranty expenses Loan payable Total liabilities Net assets 193,000 5,000 164,000 7,000 120,000 1.265.000 600.000 52.354,000 b) Prepare the applicable journal entries al 30 June 2020 to recognize the tax adjus.ments determined in the deferred tax worksheet. (5 marks) c) How would your answer differ if Cocina Laackiped the revaluation mxlel and at 30 June 2020 revalued Buildings upward by $100,000. Note that revalution ndjustments recognised under AASB 116 Propeily, Plant and Equipment are not asscasable on deductible for tax purpuses. 19 marks) 280,00 40,000 298,000 S618,000 S1.736,000 Other information: 1. The tax written down value of the plant and equipment at .30) June 2020 was $540,000 2. The Marketable government securities are reported in the statement of financinl position at their fair value with any gains and losses being recognised in profit or loss. Thic cost of the Marketable govemment securities al acquisition was $2,000). Any gains and losses are taxed when the investment is sold. At the 30 June 2020 the unrealised gains is S3,000 3. Trade receivables are net of $6,000 in provision for doubtful debes 4. There were no bad debt write-offs during the year. Ouly lad debts written off are allowed as deductibles for tax purposes. 5. Amounts received from sales, including those in credit terms, are taxed at the time the snle is made 6. All administration and salary cxpenses incurred have been paid. Administration and salary expenses are deductible fue lax purposes when paid. 7. Interest receivable represent interest revenue received in advance. Interest income is assessable for tax purposes when received Page 5 of 12 Page 6 of 12