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Hi Mike!
Having some issue in the BPP kit. Need your help!
The statements of financial position of Nedburg include the following extracts:
Statements of financial position as at 30 September
20X2 20X1
$m $m
Non-current liabilities
Deferred tax 310 140
Current liabilities
Taxation 130 160
The tax charge in the statement of profit or loss for the year ended 30 September 20X2 is $270 million.
What amount of tax was paid during the year to 30 September 20X2?Thanks
1. The answer is $130M.
2. How to obtain it?For a cash flow question you need only ONE T account for the calculation of tax paid
Put in the TWO figures brought forward
Put in the tWO figures carried forward
Record the tax charge for the year
The balancing figure is cash paid (or possibly / unlikely) cash received
Sing the mantra to yourself:
Brought forward
Income statement
Carried forward
Cashexcept this time (and the same with the calculation of payments to finance lease creditors) we have two brought forward amounts and TWo carried forward amounts so the mantra has to be:
Brought forward
Brought forward
Income statement
Carried forward
Carried forward
CashIn the above Nedberg question we have:
140 Brought forward
160 Brought forward
270 Income statement
(310) Carried forward
(130) Carried forward
130 CashPractice on the mini exercises in the course notes, section 8 Taxation – somewhere around page 212 ish from memory
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