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Deferred tax opening balance

KKhánh4y ago
The trial balance of Highwood at 31 March 20X6 showed credit balances of $800,000 on current tax and $2.6 million on deferred tax. A property was revalued during the year giving rise to deferred tax of $3.75 million. This has been included in the deferred tax provision of $6.75 million at 31 March 20X6. The income tax charge for the year ended 31 March 20X6 is estimated at $19.4 million. What will be shown as the income tax charge in the statement of profit or loss of Highwood at 31 March 20X6? I have no idea why the Deferred Tax T- account have. Debits: 6,750 carried forward I thought it was the DTL and the opening balance is credit Please help me.
P2-D2P2-D2Tutor4y ago#1
Hi, The closing balance is the $6.75 million as stated within the question. The $2.6 million is the opening balance and from this we can then look at the movement, including that on the revaluation. Give it a try and see how you get on. Let me know if you're still struggling. Thanks
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