Question - Calculation of current and deferred tax
The following data applies to the two unrelated companies Lloyd Ltd and Cole Ltd:
Lloyd Ltd Cole Ltd
Profit before tax for the year to 30 June 2017 $1300 000 $136 000
Taxable income for the year to 30 June 2017 340 000 150 000
Deferred tax liability 1 July 2016 - 90 000
Deferred tax asset 1 July 2016 - 15 000
Taxable temporary differences at 30 June 2017 960 000 306 000
Deductible temporary differences at 30 June 2017 - 70 000
All taxable and deductible temporary differences relate to the profit or loss. Assume a corporate tax rate of 30%.
Required - For each company, prepare the journal entries to record the current and deferred tax for 30 June 2017.