Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019 b. Prepare the required tax journal entries for each year.
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a. Calculate the current and
b. Prepare the required tax
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- On 1 July 2017, Bright Star Ltd was incorporated. The accounting profit and other relevant information of Bright Star for the three years to 2019 are as follows: 2019 2018 Profit before tax $4 500 000 $3 600 000 Warranty expense — 1500 000 Depreciation expense – machinery 60 000 60 000 Gain on sale of machinery for accounting — — Warranty paid 750 000 — Tax depreciation – machinery 90 000 90 000 Gain on sale of machinery for tax — — Provision for warranty – carrying amount 750 000 1500 000 Provision for warranty – tax base — — Machinery – carrying amount 180 000 240 000 Machinery – tax base 120 000 210 000 The company tax rate is 30%. Required(a) Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019 (b) Prepare…The following information was extracted from the records of Jackson Ltd as at 30 June 2020.Asset (liability)Accounts receivableMotor vehiclesProvision for warrantyDeposits received in advanceCarrying amount$150 000165 000(12 000)(15 000)Tax base$175 000125 00000The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. Depositsare taxable when received, and warranty costs are deductible when paid. An allowance for doubtfuldebts of $25 000 has been raised against accounts receivable for accounting purposes, but such debtsare deductible only when written off as uncollectable.Required1. Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify yourclassification of each difference as either a deductible temporary difference or a taxabletemporary difference.2. Prepare a deferred tax worksheet and the journal entry to record deferred tax for the yearended 30 June 2020 assuming no deferred items had been raised in prior years.On 1 July 2017, Bright Star Ltd was incorporated. The accounting profit and other relevant information of Bright Star for the two years to 2019 are as follows: 2019 2018 Profit before tax $4 500 000 $3 600 000 Warranty expense — 1500 000 Depreciation expense – machinery 60 000 60 000 Gain on sale of machinery for accounting — — Warranty paid 750 000 — Tax depreciation – machinery 90 000 90 000 Gain on sale of machinery for tax — — Provision for warranty – carrying amount 750 000 1500 000 Provision for warranty – tax base — — Machinery – carrying amount 180 000 240 000 Machinery – tax base 120 000 210 000 The company tax…
- The accounting profit before tax of Lindfield Ltd for the year ended 30 June 2022 was $150,000, including the following items of income and expense. $ Government grant (exempt from tax) Entertainment expense (non-deductible) Doubtful debt expense Depreciation of Equipment (10%) Long service leave expense Interest expense 5,000 14,000 8,000 35,000 13,000 8,000 Additional Information 1. The tax depreciation rate for equipment is 15% p.a., on a straight-line basis. 2. Bad debt written-off during the year was $3,000. 3. No long service leave was paid for the year 2022. 4. The interest payable account had a zero balance (nil balance) at the end of 30 June 2022. 5. The company tax rate is assumed to be 30%. Required Prepare the current tax worksheet and the journal entry to recognise the current tax at 30 June 2022. please give me the answer by making proper worksheet pleaseOn 1 July 2017, Bright Star Ltd was incorporated. The accounting profit and other relevant information of Bright Star for the two years to 2019 are as follows: 2019 2018 Profit before tax $4 500 000 $3 600 000 Warranty expense 1500 000 Depreciation expense - machinery 60 000 60 000 Gain on sale of machinery for accounting Warranty paid 750 000 Tax depreciation - machinery 90 000 90 000 Gain on sale of machinery for tax 750 000 1500 000 Provision for warranty - carrying amount Provision for warranty-tax base Machinery - carrying amount 180 000 240 000 Machinery - tax base 210 000 120 000 The company tax rate is 30%. Required (a) Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019 (b) Prepare the required tax journal entries for each year.Bellago Ltd made an accounting profit before tax of $75,000 for the year ended 30 June 2020.The following items were included in the accounts: Donations to political parties , non deductible 4,000 Depreciation machinery ,20% 15,000 Annual leave expense 5,800 Rent revenue 8,000 Goodwill amortised , non deductible 12,000 For tax purposes the following applied : Depreciation rate for machinery 15% Annual leave paid 4,500 Rent received 12,000 Income tax rate…
- For the year ended 30 June 2022, Chilli Ltd had a taxable profit of $460 000. The following comparative information was ascertained from the tax calculations of Chilli: 2021 2022 $184 000 $68 000 Deferred tax asset Deferred tax liability $156 000 $80 000 Required: Suppose the tax rate is 30 per cent. Prepare the journal entries to account for the income tax expenses of Chilli Ltd for the year ended 30 June 2022 in accordance with AASB 112 Income Taxes.The following information was extracted from the records of Jackson Ltd as at 30 June 2020. Carrying amount Tax base Asset (liability) Accounts receivable $150 000 165 000 $175 000 Motor vehicles 125 000 Provision for warranty Deposits received in advance (12000) (15000) The depreciation rates for accounting and taxation are 15% p.a. and 25% p.a. respectively. 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 pur- poses, but such debts are deductible only when written off as uncollectable. Calculate the temporary differences for Jackson Ltd as at 30 June 2020. Justify your classification of each difference as either a deductible temporary difference or a taxable temporary difference. Prepare a deferred tax worksheet and the journal entry to record deferred tax for the year ended 30 June 2020 assuming no deferred items had been raised in prior years.The accounting income (loss) figures for Flounder Corporation are as follows: 2018 $162,000 2019 246,000 2020 84,000 2021 (162,000) 2022 (385,000) 2023 140,000 2024 156,000 Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2018 and 2019, and a 25% tax rate for the remaining years. Prepare the journal entries for each of the years 2020 to 2024 to record income tax expense and the effects of the tax loss carrybacks and carryforwards, assuming Flounder uses the carryback provision first. All income and losses relate to normal operations and it is more likely than not that the company will generate substantial taxable income in the future. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Year Account Titles and Explanation Debit…
- MelSyd limited has determined its accounting profit before tax for the year ended 30 June 2021 to be $255,700. Included in this profit are the items of revenue and expense shown below Royalty revenue (non-taxable exempt ncome) $8000 Entertainment expense (non-deductible) $1700 Depreciation expense - plant 22500 Doubtful debt expense 4100 Annual leave expense 46000 Insurance expense 4200 Development expense 15000 The company's draft statement of financial position (Balance Sheet) with carrying amount (extract) and corresponding tax bases at 30 June 2021 showed the following assets and liabilities: Assets(extract) $ Carrying amount Tax base Cash 2500 2500 Account receivables 21500 Less Allowance for doubtful debt (4000) 17500 21500 Inventories 31600 31600 Prepaid insurance 4500 0 land 75000 75000 plant 150000 Less accumulated…Question At 30 June 2019, Beta Ltd had the following deferred tax balances:Deferred tax liability $18,000Deferred tax asset 15,000Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included thefollowing items:Depreciation expense – plant $7,000Doubtful debts expense 3,000Long-service leave expense 4,000For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020:Tax depreciation – plant $8,000Bad debts written off 2,000Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rateof 30% applies.Required:d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020Question oneAbani Limited acquired a machinery on 1/1/2020 for K200,000. The company depreciates the machinery at 25% per annum on cost. The company`s tax rate is 35% and that the year end is 31/12.The company is entitled to the following capital allowances:Year K2020 100,0002021 100 0002022 02023 0The company also had the following profits before tax but after depreciation as follows:Year K2020 125,0002021 140,0002022 175.0002023 192,000You are required to prepare the profit and Loss account extracts for all the yearsa) Ignore Deferred tax b) Include deferred tax c) Statement of Financial position (extracts) for the years 2020 to 2023