Required: a. Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019b. Prepare the required tax journal entries for each year. On 1 July 2017, Bright Star Ltd was incorporated. The accounting profit and other relevant informationof Bright Star for the three years to 2019 are as follows:20192018Profit before tax$4 500 000$3 600 000Warranty expense1500 000Depreciation expense - machinery60 00060 000Gain on sale of machinery for accountingWarranty paid750 000Tax depreciation - machinery90 00090 000Gain on sale of machinery for taxProvision for warranty - carrying amount1500 000750 000Provision for warranty - tax baseMachinery - carrying amount180 000240 000Machinery-tax base210 000120 000The company tax rate is 30%.

Step 1 Journal is the part of book keeping.

Answered: Calculate the current and deferred tax…

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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 two years to 2019 are as follows: Data provided in the image. RequiredCalculate 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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