Red Hill Ltd had a tax loss of $50,200 for the year ended 30 June 2020. The financial statements of Red Hill Ltd for the year ended 30 June 2021 showed a profit before tax of $100,000, including the following items of income and expense:
Impairment of goodwill 12,000
Depreciation expense - equipment 60,000
Bad debts expense 6,400
Long service leave expense 16,000
Insurance expense 2,000
Additional Information for 30 June 2021:
- The tax deduction for equipment depreciation was $80,000.
- The balance in the Allowance for Doubtful Debts account at 30 June 2020 was $15,000, and at 30 June 2021 the balance in the account was $10,000.
- Long service leave costs of $24,000 had been paid during the current year.
- The balance of the Prepaid Insurance account at 30 June 2020 was $4,800, and the balance in the account at 30 June 2021 was $3,600.
- The tax rate is 30%.
Problem 1: Prepare the complete current tax worksheet for the year ended 30 June 2021 and the journal entries to record current tax (and/or deferred tax). Narrations are not required.