Lecture Topic 5 Part I

Lecture Topic 5 Part I - Lecture Topic 5 Problem 8.1...

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Lecture Topic 5 Problem 8.1 Current and deferred tax Kilcoy Ltd Current Tax Worksheet (for year ended 30 June 2010) $$ Accounting profit 256 700 Add: Entertainment expense (non deductible) 1 700 Depreciation – buildings (non deductible) 7 600 Depreciation – plant 22 500 Insurance expense 4 200 Development expenditure 15 000 Doubtful debts expense 4 100 Annual leave expense 46 000 101 100 Deduct: 357 800 Royalty revenue (tax exempt) 8 000 Bad debts written off 3 500 Annual leave paid 52 000 Insurance paid 3 700 Depreciation – plant (tax) 30 000 Gain – Sale of buildings (non assessable) 5 000 (102 200) Taxable income 255 600 Add back exempt income 8 000 263 600 Tax loss recouped (12 500) Taxable income 251 100 Tax payable @ 30% 75 330 Less quarterly tax paid (53 500) Current tax liability 21 830 Workings: Depreciation of plant for tax purposes: $150 000 x 20% = $30 000. Accumulated depreciation for tax purposes is $30 000 x 3 = $90 000. The entry to recognise current tax is: Income Tax Expense (current) Dr 25 580 Current Tax Liability
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Lecture Topic 5 Part I - Lecture Topic 5 Problem 8.1...

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