MelSyd limited has determined its accounting profit before tax for the year ended 30 June 2021 to be $255,700. Included in this profit are the items of revenue and expense shown below Royalty revenue (non-taxable exempt ncome) $8000 Entertainment expense (non-deductible) $1700 Depreciation expense - plant 22500 Doubtful debt expense 4100 Annual leave expense 46000 Insurance expense 4200 Development expense 15000 The company's draft statement of financial position (Balance Sheet) with carrying amount (extract) and corresponding tax bases at 30 June 2021 showed the following assets and liabilities: Assets(extract) $ Carrying amount Tax base Cash 2500 2500 Account receivables 21500 Less Allowance for doubtful debt (4000) 17500 21500 Inventories 31600 31600 Prepaid insurance 4500 0 land 75000 75000 plant 150000 Less accumulated depreciation (67500) 82500 60000 Deferred tax asset (DTA) opening balance 6000 Liabilities (extract): Accounts payable 25000 25000 Provision for Annual leave 10000 0 Deferred tax liability DTL) opening balance 6000 0 Loan 140000 140000 Additional information: The tax depreciation rate for plant (which cost $150,000 3 years ago) is 20%. During the year, the following cash amounts were paid for: Annual leave 52000 Insurance 3700 ( c) Bad debts of $3,500 were written off against the allowance for doubtful debts during the year. The $15,000 spent (recognised (d) expense) on development during the year is not deductible for tax purposes until 30 June 2021. The company tax rate is 30%Required ) Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts

MelSyd limited has determined its accounting profit before tax for the year ended 30 June 2021 to be $255,700. Included in this profit are the items of revenue and expense shown below Royalty revenue...

MelSyd limited has determined its accounting profit before tax for the year ended 30 June 2021 to be $255,700. Included in this profit are the items of revenue and expense shown below

Royalty revenue (non-taxable exempt ncome)	$8000
Entertainment expense (non-deductible)	$1700
Depreciation expense - plant	22500
Doubtful debt expense	4100
Annual leave expense	46000
Insurance expense	4200
Development expense	15000

The company's draft statement of financial position (Balance Sheet) with carrying amount (extract) and corresponding tax bases at 30 June 2021 showed the following assets and liabilities:

Assets(extract)	$	Carrying amount	Tax base
Cash		2500	2500
Account receivables	21500
Less Allowance for doubtful debt	(4000)	17500	21500
Inventories		31600	31600
Prepaid insurance		4500	0
land		75000	75000
plant	150000
Less accumulated depreciation	(67500)	82500	60000
Deferred tax asset (DTA) opening balance		6000
Liabilities (extract):
Accounts payable		25000	25000
Provision for Annual leave		10000	0
Deferred tax liability DTL) opening balance		6000	0
Loan		140000	140000

Additional information:

The tax depreciation rate for plant (which cost $150,000 3 years ago) is 20%.

During the year, the following cash amounts were paid for:

Annual leave	52000
Insurance	3700

( c) Bad debts of $3,500 were written off against the allowance for doubtful debts during the year.

The $15,000 spent (recognised (d) expense) on development during the year is not deductible for tax purposes until 30 June 2021.

The company tax rate is 30%

Required

) Prepare the deferred tax worksheet and journal entries to adjust deferred tax accounts

Jun 11, 2022

SOLUTION.PDF

MelSyd limited has determined its accounting profit before tax for the year ended 30 June 2021 to be $255,700. Included in this profit are the items of revenue and expense shown below Royalty revenue...

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