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Kaplan exercise:
Choccychip estimated last year’s tax charge to be $230,000. As it happened, their tax advisor settled with the tax authorities at $222,000.
This year, Choccychip estimate their tax bill to be $265,000, but they are a little confused as to how this should be reflected in the financial statements. Which of the following is correct for the end of the current year?
My answer is $265K in the statement of financial position liabilities and $257K ($265K – overprovided $8K of last year) in the income statement tax.
But the book answer is $273K in the statement of financial position liabilities and $265K in the income statement tax.
Not sure if I have done it wrong. Can anyone tell if the book answer is correct?
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