QUESTION 1 (18 marks)
The statement of financial position of Sally Ltd at 30 June 2020 showed the following assets and liabilities.
Assets
2020 ($)
2019 ($)
Cash
80,000
85,000
Inventories
170,000
155,000
Accounts Receivable
520,000
480,000
Allowance for Doubtful Debts
(60,000)
(40,000)
Plant
500,000
500,000
Accumulated depreciation – plant
(260,000)
(210,000)
Deferred Tax Asset
?
35,500
Liabilities
Accounts payable
290,000
260,000
Provision for long service leave
48,500
45,000
Rent Received in advance
22,500
20,000
Deferred Tax Liability
?
0
Additional information
Accumulated depreciation of plant for tax purposes was $330,000 at 30 June 2019, and depreciation for tax purposes for the year ended 30 June 2020 amounted to $80,000.
The tax rate is 30%.
Required (show all workings):
Prepare Sally's deferred tax worksheet/workings at 30 June 2020 (showing only relevant assets and liabilities), and prepare the deferred tax journal entry required on 30 June 2020. Narration is not required. (Total - 18 marks)
(Australia country)