Mini exercises Deferred Tax q10 page 208

Hi mike

I will be finished these mini exercises soon enough!

Can you let me know why in your solution you send the deferred tax 1800 charge for the year to the current tax account and then transfer it all to the income statement from there? Is this just the way it is or is there a thinking behind it?

My version of it was

Dr I/S 1800 (deferred tax)
Cr Deferred Tax 1800

Dr I/S 24300 (current tax)
Cr Current Tax 24300

Where you did this

Dr Current Tax 1800
Cr Deferred Tax 1800

Dr I/S 26100
CR Current Tax 26100

We get the same answer (I think), is it that there is no need to send two amounts to the income statement for taxaxation so its neater to transfer it from the current tax account?

Cheers

Hugh