• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Tax Liability

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Tax Liability

  • This topic has 2 replies, 2 voices, and was last updated 9 months ago by alawi sayed.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • May 26, 2022 at 8:30 am #656484
    alawi sayed
    Participant
    • Topics: 174
    • Replies: 197
    • ☆☆☆

    Hello Sir,

    First of all when we talk about tax liability it means the figure which appears in the Balance sheet.

    it should be composed of two things

    The deferred tax balance : which I supposed it will be the total deferred tax amount during the year .

    and the provision of tax for the year

    right??

    so how it was arrived at in the following qusetion.

    Please clarify this critical point Sir,

    Thanks,

    Q

    134 Jasper Orange Co’s trial balance at 31 December 20X3 shows a debit balance of $700,000 on current tax
    and a credit balance of $8,400,000 on deferred tax. The directors have estimated the provision for income
    tax for the year at $4.5 million and the required deferred tax provision is $5.6 million, $1.2 million of which
    relates to a property revaluation.
    What is the tax liability recognised in Jasper Orange Co’s statement of financial position for the year ended
    31 December 20X3?
    A $1 million
    B $2.4 million
    C $1.2 million
    D $3.6 million

    Answer

    134 C $1.2million
    $’000
    Prior year underprovision 700
    Current provision 4,500
    Movement of deferred tax (8.4 – 5.6) (2,800)
    Deferred tax on revaluation surplus (1,200)
    Tax liability for the year 1,200

    May 30, 2022 at 5:36 pm #656894
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 6493
    • ☆☆☆☆☆

    No! The tax liability is the estimate for the current year-end. Where did the above question come from as if it is asking for the tax liability then this is the balance of $4.5m. From the answer given it looks like the question should be asking for the tax expense recorded in profit or loss.

    Thanks

    May 30, 2022 at 7:32 pm #656902
    alawi sayed
    Participant
    • Topics: 174
    • Replies: 197
    • ☆☆☆

    Thanks a lot.

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • kamo7293 on Investment Appraisal – NPV, IRR – ACCA Management Accounting (MA)
  • John Moffat on Investment Appraisal – NPV, IRR – ACCA Management Accounting (MA)
  • Hi?n on Investment Appraisal – NPV, IRR – ACCA Management Accounting (MA)
  • Ken Garrett on ACCA AB Chapter 19 – Macroeconomics – Questions
  • Ken Garrett on ACCA AB Chapter 19 – Macroeconomics – Questions

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy