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Hi mike.
Sofp2010. 2009
CA
Tax refund. 500. NilNCL
Def tax. 1200. 800
CL
Current tax. Nil. 25000SOPL 2010.
Tax relief. 700How much tax is paid?
This is my answer
B/f ( 800+ 2500)
Tax relief 700C/f (1200-500)
I got 140 tax. Paid but Kaplan answer is 1900. I don’t understand why.Heaven knows how you got 140! All the figures are round hundreds!
It also would have helped if you had written 2,500 instead of 25000 (that’s why I always use the thousand separating comma
In the deferred tax account, debit, I have 1,200 carry forward liability
On the credit side I have 800 brought forward
So a balancing figure of 400 on the credit side going to the debit of the current tax account
Also on the current tax debit side I have 700 from the tax relief, double entered in the sopl
On the credit side of the current tax account I have 2,500 brought forward liability
In addition on the credit side carried forward to next year’s debit side I have a 500 asset tax refund receivable
That gives me a missing figure on the debit side of 1,900 and that must be cash paid
OK?
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