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Windy Ltd has requested that you prepare a tax-effect accounting information for the year ended 30 June 2021. The following has been extracted from their internal reports:

-Accounting profit before tac for the year ........ $855,000

-Expenses brought into account included

Depreciation - Plant ($93, 000)

Impairment loss on goodwill ($13, 500)

Long service leave ($13, 000)

-Accumulated depreciation on plant for tax purposes was $13,000 in 30 June 2020 and $270,000 on 30 June 2021. There were no additions or disposals of plant during the year.

--Bad debts of $14,700 were writted off during the year against Allowance for Doubtful Debts.

-On 1 January 2021 the company income tax rate was increased from30% to 35%,effective for 2020/2021 tax year and onwards. The deferred tax opening balances on

-1 July 2020 were:

Deferred Tax Asset (based on DTD of $85,000) ........$25,500

Deferred Tax Liability (based on TTD of $65,000) ........$19,500

(DTD: deductible temporary differences; TTD: taxab;e temporary differences)

-Reporting date is 30 June.

Relevant assets and liabilities are disclosed in balance sheet as at 30 June 2021 were:

Assets

Accounts Receivable ------------------- $245 000

Less: Allowance for doubtful Debts [2020 $11 000] ........ $15 000. $230 000

Inventory ............................................ $286,000

Plant-cost ........................................... $750 000

Less: Accumulated Depreciation- Plant ....................$175 000$575,000

Liabilities

Accounts Payable ............................... $202,000

Provision for long-service leave .............[2020 $57,000] ................$60 000

Required

(i)Provide the journal entry to adjust the opening deferred tax accounts due to the tax rate change. (Narrations are required) - 2 marks

(ii)Show the calculation of income tax expense and income taxable payable (7marks)

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