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The statements of financial position of Pinto included the following.
Statements of financial position as at:
31 March 20X8 31 March 20X7
$’000 $’000
Current assets
Income tax asset – 50
Non-current liabilities
Deferred tax 50 30
Current liabilities
Income tax payable 150 –
The profit or loss income tax charge for the year ended 31 March 20X8 is estimated at $160,000.
What amount of income tax has been received or paid during the year ended 31 March 20X8?
A $60,000 paid
B $40,000 paid
C $60,000 received
D $40,000 receivedHow to solve this question ?
Usual rules!
Open 2 T accounts – one for Deferred Tax and one for Current Tax
Put in the figures you know … so that’s 2 figures brought forward – one each for the two accounts
… and 2 figures carried forward – one of which is $zero
Balance off the Deferred Tax account and double enter the balancing figure to the Current Tax account
Double enter the estimated tax charge (Dr Statement of profit or loss Cr Current Tax)
Balance off the current tax account and hope that your figure matches one of the options!
OK?
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