M 20 The following information was extracted from the records of Terra Ltd. for the year ended 30June 2024.Accounts receivableAccumulated depreciation - motor vehiclesAllowance for doubtful debtsBad debts expenseDeferred tax assetDeferred tax liabilityInsurance ExpenseInterest payableMotor vehiclesPrepaid insuranceRent receivableRent revenueAdditional informationTerra LTDas 30 June 2024✓ Interest expenses✓Estimated useful-life for tax purposes✓ Estimated useful-life for accountingRent receivedOpening balance for prepaid insuranceOpening balance for the allowance for doubtful debtsTax rateProfit before tax90,000(44,000)(18,000)20,00010,7505,39012,8007,000220,00024,0003,4005,00010 years15 years2,00018008,0003,00030%341,200Required:a. Prepare the current tax worksheet and related journal entries.b. Prepare the deferred tax worksheet and related journal entries.

INTRODUCTION Current tax: The amount of income tax that has been found to be due (salvage value) in…

The following information was extracted from the records of Terra Ltd. for the year ended 30 June 2024. Accounts receivable Accumulated depreciation - motor vehicles Allowance for doubtful debts Bad debts expense Deferred tax asset Deferred tax liability Insurance Expense Interest payable Motor vehicles Prepaid insurance Rent receivable Rent revenue Terra LTD as 30 June 2024 Additional information ✔Estimated useful-life for tax purposes ✓ Estimated useful-life for accounting ✔Rent received 90,000 (44,000) (18,000) 20,000 10,750 5,390 12,800 7,000 220,000 24,000 3,400 5,000 Opening balance for prepaid insurance ✓ Opening balance for the allowance for doubtful debts ✓ Interest expenses ✓ Tax rate ✓Profit before tax 10 years 15 years 2,000 1800 8,000 3,000 30% 341,200 Required: a. Prepare the current tax worksheet and related journal entries. b. Prepare the deferred tax worksheet and related journal entries.

The following information was extracted from the records of Terra Ltd. for the year ended 30 June 2024. Accounts receivable Accumulated depreciation - motor vehicles Allowance for doubtful debts Bad debts expense Deferred tax asset Deferred tax liability Insurance Expense Interest payable Motor vehicles Prepaid insurance Rent receivable Rent revenue Terra LTD as 30 June 2024 Additional information ✔Estimated useful-life for tax purposes ✓ Estimated useful-life for accounting ✔Rent received 90,000 (44,000) (18,000) 20,000 10,750 5,390 12,800 7,000 220,000 24,000 3,400 5,000 Opening balance for prepaid insurance ✓ Opening balance for the allowance for doubtful debts ✓ Interest expenses ✓ Tax rate ✓Profit before tax 10 years 15 years 2,000 1800 8,000 3,000 30% 341,200 Required: a. Prepare the current tax worksheet and related journal entries. b. Prepare the deferred tax worksheet and related journal entries.

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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