(a) Calculation of taxable income and its current tax consequences for year end 30 June 2020 ($'000)

Accounting Profit before tax 314

Permanent Differences:
Good-will impairment paid 12 Income
Tax Expense: 97.8
Temporary Differences:
Insurance Expenses 30
Insurance paid (23) 7
Warranty Expense 41
Warranty Cost paid (21) 20
LSL Expense 28
LSL Paid (46) (18)
Accounting Depreciation - Plant 80
Tax Depreciation (100) (20)
D.Debt Expense 21
D.Debt Written off (21) 0
Taxable Profit 315 Income
Tax Payable: 94.5
(ảnh chụp)

Prepaid Insurance

O/b 10

Insurance expense
Insurance paid 23
30

C/b 3

D. Debt Allowance

O/b 6

D.Debt Written off

D/d expense 21
21

C/b 6

Provision for warranty

O/b 25

Warranty cost paid Warranty Expense

21 41
C/b 45

Provision for LSL

O/b 20

LSL paid 46 LSL Expense 28

C/b 2

(b) Determine future tax consequences for year end 30 June 2020 ($'000)

Carrying Tax Base Deductible Taxable Income Income

Amount Temporary Temporary Tax Tax
30 June 2020
Differences Differences Expense Payable

$ $ $ $ $ $

Assets

Cash 26 26

Inventory 105 105

Acc. Receivable -
129 135 6 (6)
Net

Prepaid Insurance 3 0 3 3

Plant - Net 240 200 40 40

Liabilities

Acc. Payable 74.5 74.5

Provision for
45 0 45 (45)
warranty

Provision for
2 0 2 (2)
LSL

Loan Payable 175 175

Temporary differences at period end 53 43 (10)

Less: Prior period amounts 51 30 (21)

Movement for the period 2 13 11

Tax affected 0.6 3.9 3.3

 Tax on taxable income 94.5 94.5

Income tax adjustments required 0.6 3.9 97.8 94.5

(c)
30 June 2020
Deferred tax asset 0.6
Income tax expense 97.8
Deferred tax liability 3.9
Income tax payable 94.5
(To recognise current and deferred tax consequences for year 2020)
Deferred tax liability 12.9
Deferred tax asset 12.9
(To off-set DTA and DTL for reporting purposes)
DTA bal = O/bal 15.3 (DR) + Adjustment for the current year 0.6 (DR) = 15.9
DTL bal = O/bal 9 (CR) + Current year adjustment 3.9 (CR) = 12.9
The account with the smaller balance should be off-set to the account with the larger balance. So DTL
should be off-set to DTA

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