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Practice Question:
Polo Ltd has prepared financial statements and notes to the financial statements for the year ended 30 June 2021.
Income tax expense reported in the Statement of Profit or Loss and Other Comprehensive Income for the period 30 June 2021 is $182 000.
The following balances are reported in the Statement of Financial Position:
|
| 2021 | 2020 |
| Deferred Tax Asset | 78 000 | 70 000 |
| Deferred Tax Liability | 30 000 | 34 000 |
Note to income tax expense
Current Income Tax Expense $194 000
Deferred Income Tax Expense (12 000)
Required:
Using the above information, prepare the end of year adjusting entries that Polo Ltd must have recorded in order to present the income tax expense of $182 000 in the Statement of Profit or Loss and Other Comprehensive Income for the period 30 June 2021.
