At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset $15,000 Beta ltd recorded a profit before tax of $80,00 for the year to 30 June 2020, which included the following terms: Depreciation expense-plant $7,000 Doubtful debts expense $3,000 Long-service leave expense $4,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: (a) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. (b) What are the balance of deferred tax liability and deferred tax asset at 30 June 2020?
At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset $15,000 Beta ltd recorded a profit before tax of $80,00 for the year to 30 June 2020, which included the following terms: Depreciation expense-plant $7,000 Doubtful debts expense $3,000 Long-service leave expense $4,000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: (a) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. (b) What are the balance of deferred tax liability and deferred tax asset at 30 June 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Q1) At 30 June 2019, Beta Ltd had the following
Beta ltd recorded a profit before tax of $80,00 for the year to 30 June 2020, which included the following terms:
Doubtful debts expense $3,000
Long-service leave expense $4,000
Depreciation rates for
Required:
(a) Prepare the necessary
(b) What are the balance of deferred tax liability and deferred tax asset at 30 June 2020?
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