The accountant for Lajamanu Production Ltd has the task of preparing the deferred tax
entries in the year-end financial statements at 30th June 2022.
Lajamanu Production Ltd employs 20 staff, some of whom have worked for the company for 8
years. They are entitled, as part of their salary package, to long service leave when they have
worked for the company for 10 years of continual employment. One of their managers, who has worked
for 11 years, took long service leave during the year and was paid $27,500. The company provides
for long service leave each year and the balance at 1st July 2021 was $201,000 with a closing
balance at 30th June 2022 of $192,000.
Required
As the accountant has only recently been recruited you have been asked to complete the preparation of the journal entry adjustments for any temporary tax differences and to explain in each of the situations given above the reasons for the adjustments, why the accounts have been chosen and the timing of the differences and any future reversals.