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 Tax depreciation – machinery Gain on sale of machinery for tax 750 000 90 000 90 000 1500 000 Provision for warranty - carrying amount Provision for warranty-tax base Machinery- carrying amount 750 000 180 000 240 000 Machinery - tax base 120 000 210 000 ne 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.

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 Tax depreciation – machinery Gain on sale of machinery for tax 750 000 90 000 90 000 1500 000 Provision for warranty - carrying amount Provision for warranty-tax base Machinery- carrying amount 750 000 180 000 240 000 Machinery - tax base 120 000 210 000 ne 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.

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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Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.