The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income
Question:
The profit before tax, as reported in the Statement of Profit or Loss and Other Comprehensive Income of Apple Ltd for the year ended 30 June 2020, amounted to $65,000 including the following revenue and expense items:
30 June 2020 | |
$ | |
Rent Expense | 12,000 |
Bad debts expense | 500 |
Depreciation expense - equipment | 10,000 |
Annual Leave Expense | 1,500 |
Interest Expense | 4,500 |
Fines and Penalties (non-deductible) | 2,500 |
Entertainment Expense (non-deductible) | 700 |
Interest on Govt Bonds (exempt from tax) | 2,500 |
Additional information:
- The deduction for depreciation for tax purposes is double the accounting depreciation.
- No bad debts were written off during the year.
- Rent of $15,000 was prepaid at the beginning of the year and is deducted for tax purposes when paid.
- Annual leave paid during the year was $500.
- Interest payments of $4,000 were made in cash.
- The tax rate is 30%.
Required
Prepare the current tax worksheet and the journal entry to recognise current tax at 30 June 2020.
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett