Mini exercises Deferred Tax q9 page 208

Ddrice9911y ago

Hi Mike Is it possible that I could ask why the solution sends 3750 of the deferred tax charge for the year to the revaluation reserve and 400 to current tax, if it relates to the difference in the valuation of the assets for tax purposes and thus should go to the revaluation reserve why not all of it to the revaluation reserve? Many thanks Hugh

MikeLittleTutor11y ago#1

Do I not remember that the amount of the revaluation is given as is also the tax rate? The transfer from Deferd Tax Account to Revaluation Reserve is calculated as the revaluation gain x tax rate Does that answer it?

Ddrice9911y ago#2

Hi mike, It doesn't mention a revaluation just the net assets exceeded the tax Base by 27 million.

MikeLittleTutor11y ago#3

Hi I don't even know where the 19,000 comes from! My answer (just worked out) is a transfer from deferred tax to current tax of 4,150 and a charge for current tax in the statement of profit or loss of 22,850 Thanks for bringing it to my attention - I must try harder!

Ddrice9911y ago#4

It's grand, thanks!

MikeLittleTutor11y ago#5

You're welcome