Question 4.
You are provided with the following information from the accounts of Big
Kahuna Ltd for the year ending 30 June 2019. You are to calculate
accounting profit and taxable profit.
Cash sales
$100 000
Cost of goods sold
$40 000
Amounts received in advance for services to be performed in August 2019,
$10 000
Rent expense for year ended 30 June 2019, $10 000
Rent prepaid for two months to 31 August 2019, $1 000
Doubtful debts expenses, $1 000
Amount provided in 2019 for employees' LSL entitlements, $6 000
Goodwill impairment expense, $6 000
Question 5.
Robert August Ltd commences operations on 1 July 2016.
On the same date, it purchases a fibre glassing machine at a cost of
$600 000.
The machine is expected to have a useful life of four years, with benefits
being uniform throughout its life. It will have no residual value at the end of
four years.
Hence, for accounting purposes the depreciation expense would be $150,000
per year.
For taxation purposes, the ATO allows the company to depreciate the asset
over three years—that is, $200,000 per year.
The tax rate is 30 per cent.
Determine the deferred tax liability and/or deferred tax asset that will result and
record the necessary journal entry.on 30 June 2017
