Tutorial Questions 2

Tutorial Questions 2

Contents
MAIN BODY...................................................................................................................................4
Question 1:.......................................................................................................................................4
Determining the net aggregate income tax payable for year before 30 Jun. 2020:................4
Determining by what sum deferred liability balances as well as deferred tax assets would rise
or decline for year to Jun 30, 2020 due to the depreciation amount, doubtful debts and
other long-service leave:.........................................................................................................4
Making the journal entries needed to account income tax, so the recognition requirements are
fulfilled:..................................................................................................................................5
Deferred tax liabilities account balances and deferred tax assets as on June 30, 2020:.........5
Question 2:.......................................................................................................................................5
1. On July 1, 2019...................................................................................................................5
2. On July 1, 2019...................................................................................................................6
Question 3........................................................................................................................................6
a).............................................................................................................................................6
i) Preparing consolidated worksheet entries with respect to Liala Ltd as on 30th Jun. 2017 with
regards to intragroup transfers of inventories:........................................................................6
ii) Computation of figure of the cost of goods sold which is to be stated within consolidated
income statements for year 2017 with respect to intra-group revenues:................................7
b) Entering journal entries as of 30 Jun. 2017 to minimise or eliminate any intra-group
transfers of equipment:...........................................................................................................8
Question 4:.......................................................................................................................................9
a) On the basis of given information, computing non-controlling interest sum as on 30th Jun
2019:.......................................................................................................................................9
b) Making required journal entries to identify sum of non-controlling interest as on 30th Jun,
2019:.....................................................................................................................................10
Question 5:.....................................................................................................................................10
(a) Reproducing and completing the provided controlling as well as non-controlling interests
table along with required calculations:.................................................................................10
(b) Percentage figure of voting in Son 7 Ltd which is controlled by Daddy Ltd:................11

(c) Percentage figure of dividend being declared by the Son 7 which is to be received by the
Daddy Ltd:............................................................................................................................11

MAIN BODY
Question 1:
Determining the net aggregate income tax payable for year before 30 Jun. 2020:
Current Tax work sheet for year ended 30th June, 2020
Details Amounts ($) Amounts ($)
Profit before deducting income tax $ 80,000
Addition:
Doubtful debts exp. $ 3,000
Depreciation expense-plant $ 7,000
long-service leave expense $ 4,000 $ 14,000
$ 94,000
Less:
Bad debts written off $ 2,000
Tax Depreciation - Plant $ 8,000 $ 10,000
Taxable Income $ 84,000
Current Tax liability @ 30% $ 25,200
Determining by what sum deferred liability balances as well as deferred tax assets would rise or
decline for year to Jun 30, 2020 due to the depreciation amount, doubtful debts and other long-
service leave:
Deferred tax liability: "Deferred tax liabilities relates to sum of temporary discrepancies
between balance sheet profits and taxable profits, primarily in contrast to higher amount
of deductions made in prior years towards risk and making provisions and valuation of
the tangible non-material items. Deferred tax assets and liabilities generally offset where right to
repay current tax assets for the associated deferred tax liabilities are legitimately revocable.
"Substitute tax credits" is tax charged for release for taxation purposes of the goodwill reported
in past years, covering advance payments of existing taxes.
Deferred tax asset: This is Business asset that typically occurs either when Business
has advance taxes paid. These taxes are reported on balance sheet as just an income, and are