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P2-D2.
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khanhtran14
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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 forwardI thought it was the DTL and the opening balance is credit
Please help me.
P2-D2
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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
khanhtran14
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