Tutorial 4 Questions
Chapter 13: Income taxes Comprehension questions
1. Provide five examples of differences in the treatment of revenues and expenses under AASB and ITAA.
2. What is a ‘tax loss’ and how is it accounted for?
3. List five examples of temporary differences that create deferred tax assets
4. Explain the movements that occur in deferred tax accounts due to revaluation of non- current assets.
Application and analysis questions
1.Calculation of current tax
Griffith Ltd had its accounting profit before tax as $150 000 for the year ended 30 June 2024. The following items of revenue and expense were included in the accounting profit.
Donations (non‐deductible)
Depreciation expense — equipment (20% p.a., straight‐line)
Annual leave expense
Rent revenue
For tax purposes the following applied.
Depreciation rate — equipment Annual leave paid
Rent received
Income tax rate
25% $ 7 500 $ 10 000 30%
a. Calculate the current tax liability for the year ended 30 June 2024 for Griffith Ltd,
and prepare the journal entry to recognise it.
b. Explain your treatment of annual leave expense and annual leave paid in your answer
to requirement 1.
(LO3 and LO4)
Computer Science Tutoring
2. Calculation of current and deferred tax, and adjustment entry
Koona Ltd’s accounting profit before tax for the year ended 30 June 2024 was $150 000. The company’s draft statements of financial position showed the following balances. The company tax rate is assumed to be 30%.
Inventories
Accounts receivable
Allowance for doubtful debts
Prepaid insurance
Accumulated depreciation — equipment
Accumulated depreciation — buildings
Goodwill 40 000
Deferred tax asset
Liabilities
Accounts payable Accrued expenses payable Mortgage loan
Warranty payable
Current tax liability Deferred tax liability
Additional information
255 000 120 000 210 000
70 000 9 000 12 000
40 000 150 000 300 000
50 000 160 000 420 000
(21 500) 15 000 260 000
(146 000) 400 000 (160 000)
270 000 90 000 210 000 50 000 ? ?
(15 000) 20 000 200 000
(100 000) 400 000 (140 000)
Duringtheyearended30June2024,KoonaLtdreceivedanon-taxableroyaltyrevenue of $20 000.
Amountsreceivedfromsales,includingthoseoncreditterms,aretaxedatthetimethe sale is made. Koona Ltd recognised $20 000 in bad debts expense during the year ended 30 June 2024.
Insurance expense incurred during the year ended 30 June 2024 was $20 000. The amounts paid in cash for insurance are allowed to be claimed as deductions for tax purposes.
The equipment is depreciated on a straight-line basis over 5 years for accounting purposes and over 4 years for taxation purposes. The equipment is not expected to have any residual value. The only movement in the equipment account during the year ended 30 June 2024 was a result of Koona Ltd acquiring a new equipment on 1 January 2024.
The buildings are depreciated on a straight line basis over 20 years for accounting purposes and are not expected to have any residual value. Depreciation of buildings is
Programming Help
not allowed to be claimed as a deduction for tax purposes. There is no movement in the
Buildings account during the year ended 30 June 2024.
Duringtheyearended30June2024,KoonaLtdpaidaccruedexpensesof$210000and
recognised $45 000 in warranty expense. These expenses are not deductible for tax
purposes until they are actually paid.
Therearenootheritemsthatcausedifferencesbetweenaccountingandtaxableprofit.
During the year ended 30 June 2024, Koona Ltd paid the Australian Taxation Office
the following instalments for income tax:
1. 1 August 2023: $9 000
2. 1 November 2023: $7 000 3. 1 March 2024: $7 500
4. 1 May 2024: $8 000.
1. Prepare the current tax worksheet and the journal entry to recognise current tax at
30 June 2024.
2. Prepare the deferred tax worksheet and journal entries to adjust deferred tax
accounts. (LO4 and LO5)
浙大学霸代写 加微信 cstutorcs