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 $5 000 1 500 3 000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2017: Tax depreciation – plant Bad debts written off $5 500 1 000 Depreciation rates for taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies. Required: 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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Sunflower Ltd purchased 100% of the issued capital of Rose Ltd for a cash consideration of $1.7 million on 1 July 2019. At that time the fair value of the net assets of Rose Ltd were represented by: Share capital $1,000,000 Retained earnings $500,000 $1,500,000 Goodwill had been determined to have been impaired by $20 000 during the period. During the period ended 30 June 2020, Rose Ltd sold inventory that cost $450 000 for $620 000 to Sunflower Ltd. Twenty per cent of this inventory remains on hand in Sunflower Ltd at the end of the year. Both companies use a perpetual inventory system. The taxation rate is 30%. At the end of the period Rose Ltd declared a dividend…

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Scenario Quantum Robotics are a manufacturing company who supply custom made robotic components.  You are required to provide a spreadsheet that will help cost individual jobs, provide a summary of completed jobs for the year and help manage inventory. Start by downloading the assessment workbook from iLearn and copying/moving it to an appropriate folder. When you open the Excel file it is very important that you Enable Macros and Content. You will then be asked to enter your Student Number (you will not be able to edit it afterwards, so type it in carefully) and then enter your Student Name. Please note the first three worksheets are locked, and you will only be able to change the cells specified.   General…

On 1 July 2014 Padma Ltd acquires 25 per cent of the issued capital of Jamuna Ltd for a cash consideration of $360000.At the date of acquisition, the shareholders’ equity of Jamuna Ltd is:   Share capital $450,000 Retained earnings $300,000 Total shareholders’ equity 750000   Additional information On the date of acquisition, buildings have a carrying amount in the accounts of Jamuna Ltd of $240000 and a market value of $300000. The buildings have an estimated useful life of 10 years after 1 July 2014. For the year ending 30 June 2015 Jamuna Ltd records an after-tax profit of $90000, from which it pays a dividend of $30000. For the year ending 30 June 2016 Jamuna Ltd records an after-tax…

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Apple Ltd acquired 100% of the issued shares of Orange Ltd, for $290,000 paid in cash.  At the date of acquisition, 1 July 2018, the reported shareholder’s equity of Orange Ltd was: Ordinary shares                                              $180,000 Retained earnings                                          $120,000 $300,000 The Apple Group adopted the cost model to measure property, plant and equipment and identifiable intangible assets.  The carrying amounts and fair values of the recorded assets and liabilities of Orange Ltd at 1 July 2018 were as shown below:     Carrying amount Fair value Assets     Cash at bank $25,000 $25,000 Trade debtors $26,000 $26,000 Inventories $40,000 $45,000 Equipment $1,620,000 $1,350,000 Less Accumulated depreciation -$450,000   Land $50,000 $64,000 Less Liabilities…

Question The following information relates to Moon Light Ltd. (a) At the beginning of the accounting period the company has a salary payable liability of $200 and at the reporting date a salary payable of $360. During the year the salary expense shown in the income statement was $400. (b) At the beginning of the accounting period the company has property, plant and equipment (PPE) with a carrying amount of $400. At the end of the accounting period, the carrying amount of the PPE is $1,200. During the year depreciation charged was $80, a revaluation surplus of $240 was recorded and PPE with a carrying amount of $60 was sold for $80. (c) At the beginning of the accounting period the company has retained earnings of $2,000 and…

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Question 1 Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of $12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST. Required: Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June. Calculate the depreciation expense for the second year using each of the following depreciation methods straight-line diminishing balance (depreciation rate has been calculated as 31%) units of production (assume the van was driven 50,000 kilometers in the first year and 78,000 kilometres during the second financial year). Record the adjusting entries for the depreciation at the end of the second financial year using straight-line method. Show how…

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Question 1 International Printer Machines (IPM) builds three computer printer models: Alpha, Beta, and Gamma. Information for these three products is as follows:   Alpha Beta Gamma Total Selling price per unit $250 $400 $1 500   Variable cost per unit $80 $200 $800   Expected unit sales (annual) 12,000 6,000 2,000 20,000 Sales mix 50 percent 40 percent 10 percent 100 percent   Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels of sales. Required: Calculate the weighted average unit contribution margin, assuming a constant sales mix. How many units of each printer must be sold to break even? i) Explain what is margin of safety ii) Calculate in sales units the margin…

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On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date. The exchange rates at the relevant dates are: 1 March 2020 A$1.00 = NZ$1.20 30 June 2020 A$1.00 = NZ$1.30 1 June 2021 A$1.00 = NZ$1.25 Required: a) Determine the amount in AUD, as at: 1 March 2020; 30 June 2020; b) Prepare the journal entries for the above dates, upto 1 June,…

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