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The accounting profit before tax for the year ended 30 June 2013 for Lily Ltd amounted to $18 500 and included:

Additional information

(a)The company can claim a deduction of $15000 (15%) for depreciation on equipment, but the motor vehicle is fully depreciated for tax purposes.

(b) The equipment sold during the year had been purchased for $30 000 2 years before the date of sale. (c) The company tax rate is 30%.

Required

1. Determine the balance of any current and deferred tax assets and liabilities for Lily Ltd as at 30 June 2013, using appropriate worksheets. Show all workings.

2. Prepare any necessary journal entries.

Exercise 6.11C CURRENT AND DEFERRED TAX The accounting profit before tax for the year ended 30 lune 2013 for Lily Ltd amounted to $18 500 and Depreciation-motor vehicle (25%) $ 4500 20000 16 000 5 000 2 300 1 500 19 000 18 000 5 000 -equipment (20%) Rent revenue Royalty revenue (non-taxable Doubtful debts expense Entertainment expense (non-deductible Proceeds on sale of equipment Carrying amount of equipment sold Annual leave expense The draft statement of financial position at 30 June 2013 contained the following assets and labilities: 2013 2012 11 500 12 000 3 000) 19000 2 800 18000 (15750) 100000 9500 14 000 (2 500) 21 500 2 400 18 000 (11 250) 130000 (52 000) 6450 136 100 Receivables Allowance for doubtful debts Rent receivable Motor vehicle Accumulated depreciation Equipment Accumulated depreciation Deferred tax asset motor vehicle equipment Liabilities Accounts payable Provision for annual leave Current tax liability Deferred tax liability 21 500 6000 7 600 4 500 37 845 Additional information (a) The company can claim a deduction of $15000 (15%) for depreciation on equipment, but the motor vehicle is fully depreciated for tax purposes. (b)The equipment sold during the year had been purchased for $30000 2 years before the date of sale. (c) The company tax rate is 30%. 1. Determine the balance of any current and deferred tax assets and liabilities for Lily Ltd as at 30 June 2013, using appropriate worksheets. Show all workings 2. Prepare any necessary journal entries. CHAPTER 6 Income taxes 207

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