The following information was extracted from the records of Gin Gin Ltd for the year ended 30 June 2021. Additional informationThe accumulated tax depreciation for machines at 30 June 2021 was $50 000.The tax rate is 30%. RequiredPrepare a deferred tax worksheet to identify the temporary differences arising in respect of the assets and liabilities in the statement of financial position, and to calculate the balance of the deferred tax liability and deferred tax asset accounts at 30 June 2021. Assume the opening balances of the deferred tax accounts were $2,000 for Deferred Tax Assets and $1,500 for Deferred Tax Liability.Prepare the journal entry to adjust the deferred tax account. GIN GIN LTDStatement of financial position (extract)as at 30 June 2021Assets$ 25000(2000)100 000(25 000)Accounts receivableAllowance for doubtful debts$23 000MachinesAccumulated depreciation – machines75000LiabilitiesInterest payable1000

As per IAS 12 , income tax If Carrying amount of Asset > tax base of asset - DTL should be…

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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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The following information was extracted from the records of Gin Gin Ltd for the year ended 30 June 2021.

Additional information

The accumulated tax depreciation for machines at 30 June 2021 was $50 000.
The tax rate is 30%.

Required

Prepare a deferred tax worksheet to identify the temporary differences arising in respect of the assets and liabilities in the statement of financial position, and to calculate the balance of the deferred tax liability and deferred tax asset accounts at 30 June 2021. Assume the opening balances of the deferred tax accounts were $2,000 for Deferred Tax Assets and $1,500 for Deferred Tax Liability.
Prepare the journal entry to adjust the deferred tax account.

GIN GIN LTD
Statement of financial position (extract)
as at 30 June 2021
Assets
$ 25000
(2000)
100 000
(25 000)
Accounts receivable
Allowance for doubtful debts
$23 000
Machines
Accumulated depreciation – machines
75000
Liabilities
Interest payable
1000

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