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Q1.

Bahrain Co. accounting profit for the year ended 31 Dec. 2020 was BD1,245,000. Included in this profit were the following items of income and expenses.

Amortization expense development project	10000
Impairment of goodwill expense	9000
Entertainment expense	30000
Insurance expense	30000
Doubtful debts expense	9500
Annual leave expense	60000
Rent revenue	15000

At Dec. 31 2020, the companys draft the following Balance Sheet.

	31/12/2020	31/12/2019
Assets
Cash	55,000	65,000
Accounts receivable	295,000	277,000
Allowance for doubtful debts	(27,000)	(30,000)
Inventories	162,000	185,000
Prepaid insurance	50,000	58,000
Rent receivable	3000	6000
Development project	120,000	-
Accumulated amortisation development project	(30,000)	-
Equipment	200,000	266,667
Accumulated depreciation equipment	(90,000)	(80,000)
Goodwill	35,000	35,000
Accumulated impairment goodwill	(24,000)	(17,000)
Liabilities
Accounts payable	310,500	294,000
Provision for annual leave	14,000	15,000

Additional information

1. Taxation law allows Bahrain Co. to deduct 125% of the 80,000 spent on development during the year.

2. Bahrain Co. has capitalised development expenditure relating to a filter project and amortises the balance over the period of expected benefit (4 years).

3. Neither entertainment expenditure nor goodwill impairment expense is deductible for taxation purposes.

4. The company income tax rate is 30%.

Required

1. Calculate the current income tax payable.
2. Prepare the journal entry.

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