The following information was extracted from the records of SydMel Ltd for the year ended 30 June 2021. SydMel LtdStatement of Financial Position (Extract)As at 30 June 2021Assets Accounts receivables$26,000 Allowance for doubtful debts2,500$23,500Equipment150,000 Accumulated depreciation – Equipment (20% per year)30,000120,000Liabilities Interest Payable2,0002,000Provision for employee benefits5,0005,000 Additional informationThe allowed deductible tax depreciation rate for Equipment is 25%.None of the employee benefits has been paid. It is not deductible for tax purposes until it is actually paid.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 $3,000 for Deferred Tax Assets and $2,500 for Deferred Tax Liability.Prepare the journal entry to adjust the deferred tax account.

Name: The following information was extracted from the records of SydMel Ltd
Uploaded: 2024-03-04T10:43:15.000Z
Channel: Bartleby
Description: The following information was extracted from the records of SydMel Ltd for the year ended 30 June 2021. SydMel LtdStatement of Financial Position (Extract)As at 30 June 2021Assets Accounts receivables$26,000 Allowance for doubtful debts2,500$23,500E

CONCEPT A Deferred Tax in form of asset or liability need to be recognized when there is difference…

Answered: The following information was extracted…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Topic Video

Question

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

SydMel Ltd Statement of Financial Position (Extract) As at 30 June 2021
Assets
Accounts receivables	$26,000
Allowance for doubtful debts	2,500	$23,500
Equipment	150,000
Accumulated depreciation – Equipment (20% per year)	30,000	120,000
Liabilities
Interest Payable	2,000	2,000
Provision for employee benefits	5,000	5,000

Additional information

The allowed deductible tax depreciation rate for Equipment is 25%.
None of the employee benefits has been paid. It is not deductible for tax purposes until it is actually paid.
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 $3,000 for Deferred Tax Assets and $2,500 for Deferred Tax Liability.
Prepare the journal entry to adjust the deferred tax account.

Expert Solution

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions