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Hi sir,
I have doubt in 4) part tax calculation . I did for SOPL
My ans
Current estimate tax. 2400
Under provision. Add 800
Diff tax reduction. Less 200I get 3000 but bpp ans is 1800 why ?? They deduct 800 why and add 200 can you please explain me the reason.
This question is from past exam qstn which is Fresco co June 2012 and in bpp revision book also have this question.
Hi,
This is one of the trickier tax adjustments as the closing balance is a tax refund and not amount due to the tax authorities. So, were you have 2,400 then this should be (2,400). I think you then get the right answer using your methodology => (2,400) + 800 -200. I prefer to use T-accounts as this makes it a bit easier to work out and understand.
Thanks
Thanks sir. I understand your explanation. Ya I tried to use T-account but I confused more I don’t know why. Anyway, thanks sir for your explanation.
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