Income tax payable

Hello Mr Chris,

In the following question I have a doubt about the tax ,it says the there should be an income tax provision of 27.2 M but this at the same time considered to tax payable,so is it necessarily that the income tax expense for the years which is shown in the P&l had been paid or it can be still payable.

Thanks

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Atlas Co 36 mins
The following trial balance relates to Atlas Co at 31 March 20X3.
$’000 $’000
Equity shares of 50 cents each 50,000
Share premium 20,000
Retained earnings at 1 April 20X2 11,200
Land and buildings – at cost (land $10 million) (note (i)) 60,000
Plant and equipment – at cost (note (i)) 94,500
Accumulated depreciation at 1 April 20X2: – buildings 20,000
– plant and equipment 24,500
Inventories at 31 March 20X3 43,700
Trade receivables 42,200
Bank 6,800
Deferred tax (note (ii)) 6,200
Trade payables 35,100
Revenue 550,000
Cost of sales 411,500
Distribution costs 21,500
Administrative expenses 30,900
Dividends paid 20,000
Bank interest 700
Current tax (note (ii)) 1,200
725,000 725,000
The following notes are relevant:

(i) Non-current assets:
On 1 April 20X2, the directors of Atlas Co decided that the financial statements would show an improved
position if the land and buildings were revalued to market value. At that date, an independent valuer valued
the land at $12 million and the buildings at $35 million and these valuations were accepted by the directors.
The remaining life of the buildings at that date was 14 years. Atlas Co does not make a transfer to retained
earnings for excess depreciation. Ignore deferred tax on the revaluation surplus.
Plant and equipment is depreciated at 20% per annum using the reducing balance method and time
apportioned as appropriate. All depreciation is charged to cost of sales, but none has yet been charged on
any non-current asset for the year ended 31 March 20X3.

(ii) Atlas Co estimates that an income tax provision of $27.2 million is required for the year ended
31 March 20X3 and at that date the liability to deferred tax is $9.4 million. The movement on deferred tax
should be taken to profit or loss. The balance on current tax in the trial balance represents the under/over
provision of the tax liability for the year ended 31 March 20X2.
Required
(a) Prepare the statement of profit or loss and other comprehensive income for Atlas Co for the year
ended 31 March 20X3. (8 marks)
(b) Prepare the statement of financial position of Atlas Co as at 31 March 20X3. (10 marks)
(c) Calculate basic earnings per share for the year ended 31 March 20X3. (2 marks)