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Banjo Co estimated that its income tax liability on the profit for the year ended 30 June 20X5 was $16940. This liability was settled in February 20X6 by a payment of $17,500. Having made a tradin loss for the year ended 30 June 20X6, Banjo Co estimated that it would receive a repayment of income tax during the following period.
Sir I am unable to understand how to do such questions and there are no lextures for it.
So far I did-
Tax liability account
_________________________________________Balance b/d 16940
Cash 17500Now what is amont hsould appear on SOPL and SOFP
pls helps thanks
This could not be asked in Paper F3 because you are not expected to know tax tules.
However since they made a loss in the year ended 30 June 20X6 there would be no tax payable. Therefore they would receive back as a repayment the tax that they had over paid.
Surely there is an answer in the same book in which you found the question?!!
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