You have been asked by the management of Mok Ltd to assist with the preparation of the income tax entries for the year ended 30 June 2018. The company reported a profit before tax for the year to 30 June 2018 of $900 000. The company’s statements of financial position include assets and liabilities as follows:

	2018	2017
Accounts receivable	$ 245 000	$ 200 000
Allowance for doubtful debts	(20 000)	(10 000)
Plant – at cost	600 000	600 000
Accumulated depreciation	(190 000)	(120 000)
Development asset – at cost	360 000	200 000
Accumulated amortization	(130 000)	(80 000)
Interest receivable	10 000	20 000
Provision for long-service leave	48 000	62 000
Deferred tax asset	?	21 600
Deferred tax liability	?	60 000

(a) The company is entitled to claim a tax deduction of 125% on development costs when incurred.

(b) Interest revenue of $10 000 is included in the profit for the year to 30 June 2018.

(c) Expenses included in profit for the year to 30 June 2018 are as follows:

   parking and other fines $10 000

   depreciation expense for plant $70 000

   doubtful debts expense $25 000

   amortization of development asset $50 000

   long-service leave expense $36 000.

(d) Accumulated depreciation on plant for tax purposes is $280 000 on 30 June 2018 and $180 000 on 30 June 2017. There have been no acquisitions or disposals of plant during the current year.

(e) The corporate tax rate is 30%.

Required

Complete the current tax and deferred tax worksheets of Mok Ltd and prepare the tax entries for 30 June 2018.

Answer rating: 100% (QA)

Part 1 Current Tax Worksheet For the year ended 30 June 2018 Accounting profit 900000 Add Parking an... View the full answer