Calculate Deferred Tax Assets and Deferred Tax Liabilities as at 30 June 2020. Show your calculations by creating columns for carrying amount, tax base, assessable temporary difference, and deductible temporary difference in your worksheet. Prepare the relevant journal entries as at 30 June 2020. Justify your classification of each difference as either deductible temporary difference or taxable temporary difference for: Machinery, and Accounts receivable
The following information was extracted from the records of Elwood Ltd as at 30 June 2020.
|
Asset (liability) |
Carrying amount ($) |
Tax base ($) |
|
Machinery |
720,000 |
600,000 |
|
|
262,500 |
322,500 |
|
Prepaid rent |
45,000 |
0 |
|
Provision for warranty |
(86,000) |
0 |
|
Insurance payable |
(15,000) |
0 |
|
Deposit received in advance |
(54,000) |
0 |
Question
- Calculate Deferred Tax Assets and Deferred Tax Liabilities as at 30 June 2020. Show your calculations by creating columns for carrying amount, tax base, assessable temporary difference, and deductible temporary difference in your worksheet.
- Prepare the relevant
journal entries as at 30 June 2020. - Justify your classification of each difference as either deductible temporary difference or taxable temporary difference for:
- Machinery, and
- Accounts receivable
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