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A provision for income tax for the year ended 30th September 2013 of $3.4 million is required . The balance on current tax represents under/over provision of tax liability. At September 2013, the tax base of company’s net assets was $24 million less than their carrying amounts. This does not include the effects of the revaluation surplus of $4.4 million on land and buildings. The income tax rate of the company is 25% .
Trial balance at 30th September,2013
Deferred Tax (CREDIT) 8,000,000
Current Tax (CREDIT) 1,050,000Prepare the extract of financial statements with appropriate workings !
Is this an extract from the December 2013 F7 exam?
If so, I’ve recorded my answer with all its workings – you’ll find the recording in the F7 revision lectures.
If by chance it’s not there, there are lots of other question 2 answers on the site and they all have a working to show the tax calculations
Have you practised all the tax questions within the mini-exercises in the free course notes?
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