F7 Chapter 18 Questions
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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
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?
Could you explain how does current tax account have “brought-forward” balance? Doesn’t the concept only apply to balance sheet items?
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?
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!
and the last question as well, please
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?
That looks right
Why called a provision? Because that’s what it is! A liability of uncertain timing or amount
hi mike,
Please how did you work out the 800 & 700 credit deffered tax. question 5
I don’t understand how question 5 works……please explain me along with calculations.
thank you.
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?
hi, is there any answer to Q5(Prude plc) with detailed calculation process? Thanks
Looking for any answer on Q5, thanks.
Work out the answer, click on the appropriate option, click submit and ….
…. the answer appears on your screen
Looking for any help on Q5, thanks.
Hi, for Q1 may i ask how the deferred tax amount is derived on DR 2110 and 1110.
Please help!
Thanks!
Oh, i found the answer, thanks and please ignore my comment
Are you kidding? !!!!!!!!
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!
can you please elaborate for question 1 ?
how to derive 1110 and 2100?
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
What am I expected to say / do / write?
The combination of your three posts leaves me with nothing to do!
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
please help with workings of question 1 and 5