The following information was extracted from the records of Terra Ltd for the year ended 30 June 2024.

 

Required.

a. Prepare the current tax worksheet and related journal entries. 

b. Prepare the deferred tax worksheet and related journal entries.

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Accounts receivable Allowance for doubtful debts Motor vehicles Accumulated depreciation - motor vehicles Prepaid insurance Rent receivable Bad debts expense Interest payable Rent revenue Insurance Expense Deferred tax asset Deferred tax liability TERRA LTD as at 30 June 2024 Additional information Estimated useful-life for tax purposes ✓ Estimated useful-life for accounting ✔Rent received ✓ Tax rate Profit before tax 70,000 (15,000) 280,000 (56,000) 34,000 2,200 22,000 5,000 7,800 18,000 2,100 10,800 ✓ Opening balance for prepaid insurance 29,500 ✓ Opening balance for the allowance for doubtful debts 7,000 ✓ Interest expenses 5,000 30% 245,300 10 years 15 years 5,000 Accounts receivable Allowance for doubtful debts Motor vehicles Accumulated depreciation - motor vehicles Prepaid insurance Rent receivable Bad debts expense Interest payable Rent revenue Insurance Expense Deferred tax asset Deferred tax liability TERRA LTD as at 30 June 2024 Additional information Estimated useful-life for tax purposes ✓ Estimated useful-life for accounting ✔Rent received ✓ Tax rate Profit before tax 70,000 (15,000) 280,000 (56,000) 34,000 2,200 22,000 5,000 7,800 18,000 2,100 10,800 ✓ Opening balance for prepaid insurance 29,500 ✓ Opening balance for the allowance for doubtful debts 7,000 ✓ Interest expenses 5,000 30% 245,300 10 years 15 years 5,000