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F7 Chapter 18 Questions

VIVA

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Comments

  1. avoiddisturbings says

    June 4, 2018 at 1:50 am

    question1, why carrying value 7000 greater but in the explanation is dr? think it should be cr, because I pay less than I should pay this period, and need to pay more next period. there is a liability for nex period

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    • MikeLittle says

      June 4, 2018 at 5:36 am

      That 2,100 debit in the deferred tax account has a narrative of “Carried down” meaning that it’s carried forward as a liability into the next period

      OK?

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  2. maxacca says

    February 28, 2018 at 8:48 am

    Could you explain how does current tax account have “brought-forward” balance? Doesn’t the concept only apply to balance sheet items?

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    • maxacca says

      February 28, 2018 at 9:12 am

      Ok i think i misunderstood the concept of “current tax account”. However, could you still explain why the balances in the current tax account from the last period will affect the P&L in this period?

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  3. vikulchik07 says

    November 27, 2017 at 4:09 pm

    Hello!
    Coud you explain for me, please, q3?
    What should we do when we have deferred tax provision?
    800 000 and 19 400 000 go to P/L directly (we debitted it), but don’t undestand how to calcullete DFL =(

    Thanks in advance!

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    • vikulchik07 says

      November 27, 2017 at 7:06 pm

      and the last question as well, please

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    • vikulchik07 says

      November 27, 2017 at 10:27 pm

      I think, I understand…
      Movement liability: (‘000)
      At the start of year – 2 600
      To revaluation reserve – 3 750
      To P/L (balansing figure) – 400
      _____________________________
      Liability at the end of the year – 6 750 (why is it called provision here, not just Deferred Tax Liab.?)

      So, 19 400+400-800=19 000
      Right?

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      • MikeLittle says

        November 28, 2017 at 1:58 am

        That looks right

        Why called a provision? Because that’s what it is! A liability of uncertain timing or amount

  4. Buba says

    May 3, 2017 at 1:26 am

    hi mike,

    Please how did you work out the 800 & 700 credit deffered tax. question 5

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  5. syntyche97 says

    February 13, 2017 at 11:38 am

    I don’t understand how question 5 works……please explain me along with calculations.
    thank you.

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    • MikeLittle says

      February 13, 2017 at 11:50 am

      Open 2 T accounts, one for deferred tax and one for current tax

      In the deferred tax account:

      Debits:

      4,500 balance carried down

      Credits:

      3,000 brought down from last year

      800 to Revaluation Reserve

      700 balancing figure taken to the debit side of current tax account

      Current tax account:

      Debits:

      1,500 cash paid

      700 transferred from deferred tax

      4,600 carried forward to next year

      Credits:

      7,700 charge for the year

      Therefore the missing figure is 900 on the debit side

      OK?

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  6. christinezhai says

    August 16, 2016 at 3:33 am

    hi, is there any answer to Q5(Prude plc) with detailed calculation process? Thanks

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  7. christinezhai says

    August 4, 2016 at 9:58 am

    Looking for any answer on Q5, thanks.

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    • MikeLittle says

      August 4, 2016 at 12:17 pm

      Work out the answer, click on the appropriate option, click submit and ….

      …. the answer appears on your screen

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  8. christinezhai says

    August 4, 2016 at 9:52 am

    Looking for any help on Q5, thanks.

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  9. josephine92 says

    April 27, 2016 at 10:51 am

    Hi, for Q1 may i ask how the deferred tax amount is derived on DR 2110 and 1110.

    Please help!

    Thanks!

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    • josephine92 says

      April 27, 2016 at 10:54 am

      Oh, i found the answer, thanks and please ignore my comment

      Log in to Reply
      • MikeLittle says

        April 27, 2016 at 12:26 pm

        Are you kidding? !!!!!!!!

  10. MikeLittle says

    April 27, 2016 at 7:59 am

    Deferred tax account, debits 2,100 and 1,110

    Deferred tax account credits 3,210

    Current tax account debits 2,450 and 8,470

    Current tax account credits 1,110 and 9,810

    Put those into 2 T accounts and then work them back to the question

    For question 5 I’m just going to put in the figures from the question and leave you to work out the rest! OK?

    Deferred tax account debits 4,500

    Deferred tax account credits 3,000 and 800 (tax on revaluation surplus, double entered to Revaluation Reserve account)

    Current tax account debits 4,600 and 1,500

    Current tax account credits 7,700

    Take it from there!

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    • yudixsh says

      May 18, 2016 at 11:03 am

      can you please elaborate for question 1 ?

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      • yudixsh says

        May 18, 2016 at 12:11 pm

        how to derive 1110 and 2100?

      • yudixsh says

        May 18, 2016 at 12:23 pm

        Correct me if am wrong
        Dr Current tax a/c (2450+8470)
        Cr Def tax a/c 3210 Dr Def tax a/c 2100 (30% * 7000) missing figure in def tax a/c is 1110.

        Thus, Cr current tax a/c by 1110 and the balancing figure is 9810 taken to SPL

      • MikeLittle says

        May 18, 2016 at 3:16 pm

        What am I expected to say / do / write?

        The combination of your three posts leaves me with nothing to do!

    • Paul says

      July 27, 2016 at 8:59 am

      Dear Sir,

      On question 3 (Bite Plc),

      In which circumstances that the company has created provision of 6,750,000 ?
      Does it mean that the revaluation of properties turned into that the co has been
      paying more taxes (based on a wrong asset values ?)

      if so and we debited deffered tax, what would be the account to credit ?

      Kindly assist me

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  11. mwasaha says

    April 26, 2016 at 9:32 pm

    please help with workings of question 1 and 5

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