June 2010, Q2, note (v) Tax point

Put the figures into T accounts Deferred tax: debits: 1,800; 4,200 credits: 6,000 Current tax: debits: 12,000 credits: 1,400: 1,800 Therefore 8,800 is the tax charge in the statement of profit or loss You say "Why not it is added as I have done almost all past papers and in most of papers it is added" Two points arise from this! 1) "Why not it is added as I have done almost all past papers ...." This suggests that you are doing your workings without really understanding the whys and wherefores of what you're doing :-( 2) "and in most of papers it is added" You've just said yourself that sometimes the figure is not added, it's subtracted The key is to note which side the figure is in the trial balance. Very often it's on the debit side but, as in this case, it's on the credit side

Prior to reading your response I figured out balances column on trial balance. For confirmation I doubled-check with your answer. Many Thanks

You're welcome