Gustav Ltd commenced operations on 1 July 2011 and presents its first statement of comprehensive income for the year ending 30 June 2012 and first statement of financial position as at 30 June 2012 as follows:
Gustav Ltd
Statement of Comprehensive Income for the year ending 30 June 2012
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$
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Gross Profit
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949 000
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Less
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Insurance Expense
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26 000
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Depreciation Expense - Plant
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104 000
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Long Service Leave Expense
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26 000
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Administration Expenses
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104 000
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Warranty Expense
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39 000
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Salaries Expense
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260 000
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Accounting Profit Before Tax
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390 000
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Additional Information
- The tax rate is 30%.
- None of the long service leave expense has actually been paid and it is not deductible until it is paid.
- Amounts received from sales, including those on credit terms, are taxed at the time the sale is made.
- The plant is depreciated over ten years for accounting purposes and over five years for accounting purposes. The original cost of the plant is $1 040 000.
- Insurance was actually prepaid to the amount of $39 000. As at 30 June 2012 the balance of the prepaid insurance in the balance sheet amounted to $13 000.
- All administration and salaries expenses incurred for the year have been paid as at year end.
- Actual payments of $13 000 for warranty expenses were paid in the year ending 30 June 2012. Warranty expenses accrued in the balance sheet as at 30 June 2012 amounted to a total of $26 000. Deductions are available only when the amounts are paid and not as they are accrued.
Required
(i) Calculate the taxable profit for the year ending 30 June 2012 showing all workings.
(ii) Prepare the accounting for tax journal entry for the year ending 30 June 2012 to account for current tax consequences for the year.