|
Asset or liability |
Carrying amount ($000) |
Tax base ($000) |
Temporary difference ($000) |
|
Computers at cost |
300 |
300 |
|
|
Accumulated depreciation |
(60) |
(100) |
|
|
Computers—net |
240 |
200 |
40 |
|
Accounts receivable |
100 |
100 |
|
|
Allowance for doubtful debts |
(10) |
0 |
|
|
Accounts receivable—net |
90 |
100 |
10 |
|
Provision for warranty costs |
30 |
0 |
30 |
|
Provision for employee benefits (LSL) |
20 |
0 |
20 |
The following information is available for the following year, the year ending 30 June 2023.
|
Statement of profit or loss and other comprehensive income for Elina Ltd for the year ending 30 June 2023 |
$000 |
|
Revenue |
4 000 |
|
Cost of goods sold expense |
(1 800) |
|
Depreciation expense |
(60) |
|
Warranty expense |
(90) |
|
Bad and doubtful debts expense |
(25) |
|
Other expenses |
(1 375) |
|
Profit before tax |
650 |
|
Other comprehensive income |
Nil |
Elina Ltd depreciates computers over five years in its accounting records but over three years for tax purposes. The straight-line method is used. During the year, Elina wrote off bad debts amounting to $15 000. Warranty costs of $70 000 were paid during the year. No amounts were paid for long-service leave during the year. The following information is extracted from the statement of financial position at 30 June 2023:
|
$000 |
|
|
Assets |
|
|
Accounts receivable |
120 |
|
Allowance for doubtful debts |
(20) |
|
Liabilities |
|
|
Provision for warranty costs |
50 |
|
Provision for employee benefits (LSL) |
30 |
There was no acquisition of plant and equipment during the year.
The tax rate as at 30 June 2022 and 30 June 2023 was 30 per cent.
1. Calculate the amount of each of Elinas’ temporary differences, if any, at 30 June 2022, and state whether it is deductible or taxable.
2. What is the balance of the deferred tax liability and deferred tax asset, if any, as at 30 June 2022?
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