Johnson Ltd recorded a profit before tax of $50 000 for the year to 30 June 2017, which included the following items:
|Depreciation expense – plant
Doubtful debts expense
Long-service leave expense
For taxation purposes the following amounts are allowable deductions for the year to 30 June 2017:
|Tax depreciation – plant
Bad debts written off
Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies.
- Calculate current tax liabilities for the year ending 30 June 2017 and prepare journal entries for current tax liabilities.
- Calculate deferred tax liabilities for the year ending 30 June 2017 and prepare journal entries for deferred tax.
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