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Question 1 2 points ✓ Saved Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 4 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 Gross profit. Expenses Administration expenses Doubtful debts expense. Salaries expense... Interest..... Long-service leave Warranty expense Depreciation expense - plant Insurance expense $ 778 000 56 000 21 000 195 000 13 000 28 000 41 000 80 000 30 000 464 000 314 000 Accounting profit before income tax expense Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash....... Inventory Accounts Receivable (net of $6,000 D. Debt Allowance) Prepaid insurance Plant cost Accum Depn - Plant Liabilities Accounts Payable....... Provision for warranty Provision for long-service leave Loan Payable...... 26 000 105 000 129 000 3 000 400 000 160 000 240 000 74 500 45 000 2 000 175 000 Additional information: ⚫ Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. ⚫ The administration expense includes payment of $12,000 for goodwill impairment. ⚫ Bad debts written off during the year were $21,000. ⚫ Insurance, warranty and long-service leave are deductible for tax purposes when paid. . The tax rate is 30% Required: (a) Calculate taxable income and its current tax consequences.

Question 1 2 points ✓ Saved Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 4 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 Gross profit. Expenses Administration expenses Doubtful debts expense. Salaries expense... Interest..... Long-service leave Warranty expense Depreciation expense - plant Insurance expense $ 778 000 56 000 21 000 195 000 13 000 28 000 41 000 80 000 30 000 464 000 314 000 Accounting profit before income tax expense Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash....... Inventory Accounts Receivable (net of $6,000 D. Debt Allowance) Prepaid insurance Plant cost Accum Depn - Plant Liabilities Accounts Payable....... Provision for warranty Provision for long-service leave Loan Payable...... 26 000 105 000 129 000 3 000 400 000 160 000 240 000 74 500 45 000 2 000 175 000 Additional information: ⚫ Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. ⚫ The administration expense includes payment of $12,000 for goodwill impairment. ⚫ Bad debts written off during the year were $21,000. ⚫ Insurance, warranty and long-service leave are deductible for tax purposes when paid. . The tax rate is 30% Required: (a) Calculate taxable income and its current tax consequences.

Survey of Accounting (Accounting I)
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...
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Question 1 2 points ✓ Saved Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 4 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 Gross profit. Expenses Administration expenses Doubtful debts expense. Salaries expense... Interest..... Long-service leave Warranty expense Depreciation expense - plant Insurance expense $ 778 000 56 000 21 000 195 000 13 000 28 000 41 000 80 000 30 000 464 000 314 000 Accounting profit before income tax expense Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash....... Inventory Accounts Receivable (net of $6,000 D. Debt Allowance) Prepaid insurance Plant cost Accum Depn - Plant Liabilities Accounts Payable....... Provision for warranty Provision for long-service leave Loan Payable...... 26 000 105 000 129 000 3 000 400 000 160 000 240 000 74 500 45 000 2 000 175 000 Additional information: ⚫ Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. ⚫ The administration expense includes payment of $12,000 for goodwill impairment. ⚫ Bad debts written off during the year were $21,000. ⚫ Insurance, warranty and long-service leave are deductible for tax purposes when paid. . The tax rate is 30% Required: (a) Calculate taxable income and its current tax consequences.
Transcribed Image Text:Question 1 2 points ✓ Saved Western Sydney Ltd commenced operations on 1 July 2018. The following has been extracted from their internal reports for the second year of operations: (Note: data for the first year of operations is available from Week 4 Lecture Example) Income Statement (Extract) for the year ended 30 June 2020 Gross profit. Expenses Administration expenses Doubtful debts expense. Salaries expense... Interest..... Long-service leave Warranty expense Depreciation expense - plant Insurance expense $ 778 000 56 000 21 000 195 000 13 000 28 000 41 000 80 000 30 000 464 000 314 000 Accounting profit before income tax expense Assets and liabilities as disclosed in the balance sheet as at 30 June 2020 were: Assets Cash....... Inventory Accounts Receivable (net of $6,000 D. Debt Allowance) Prepaid insurance Plant cost Accum Depn - Plant Liabilities Accounts Payable....... Provision for warranty Provision for long-service leave Loan Payable...... 26 000 105 000 129 000 3 000 400 000 160 000 240 000 74 500 45 000 2 000 175 000 Additional information: ⚫ Plant is depreciated straight-line with no residual value over five years for accounting purposes and four years for taxation purposes. ⚫ The administration expense includes payment of $12,000 for goodwill impairment. ⚫ Bad debts written off during the year were $21,000. ⚫ Insurance, warranty and long-service leave are deductible for tax purposes when paid. . The tax rate is 30% Required: (a) Calculate taxable income and its current tax consequences.
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