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Holly, a limited liability company, has an under provision of $4300 on its tax liability account at 31 October 2008 before accounting for that years tax charge.
It estimates tax on profits for the year to be $69780.
What amounts to be shown in the financial statement in respect of tax?
What do u mean by a underprovison in the tax liability account?
Can u help me by drawing a T- Account?
Underprovision means that we did not accrue enough.
I will answer, but I am not going to produce a t-account. F3 is not a t-account exam – there is very little testing of debits and credits.
In the SOPOL there will be an expense of 69780 (this years charge) plus 4300 (the amount under-charged last year), so a total of 74,080.
In the SOFP there will be a current liability of 69780.
(You must NOT offer pirated material to people on this website – it is illegal and unethical).
Im sryy.. I thought of sending the link to her.. Im srry I wont do any hereafter….
Mark me Sir…Thnk U for the above questions….
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