The motor vehicles were acquired 2 years ago for $ 225 000. For tax purposes, a depreciation rate of 20% is applied (there is no residual value). Deposits are taxable when received, and warranty costs are deductible when paid. An allowance for doubtful debts of $25 000 has been raised against accounts receivable for accounting purposes, but such debts are deductible only when written off as uncollectable.

Required

1.  Prepare a deferred tax worksheet to calculate deferred tax for the year ended 30 June 2023 assuming no deferred items had been raised in prior years.

2. Prepare the journal entry to record deferred tax for the year ended 30 June 2023.
 

Transcribed Image Text:

Carrying amount Asset (liability) Accounts receivable 150 000 Motor vehicles 165 000 Provision for warranty (12 000) Deposits received in advance (15 000) Carrying amount Asset (liability) Accounts receivable 150 000 Motor vehicles 165 000 Provision for warranty (12 000) Deposits received in advance (15 000)

Answer rating: 100% (QA)

Step 1 Deffered tax is a tax calculated on timing difference Deffered tax can be in the na... View the full answer