Tax payable for YE

Hello tutor,

For question 1, I though the tax payable should be calculated like: closing tax payable = opening tax payable + tax expense – tax paid. I do not understand why the tax payable in SOFP for YE 20X2 is $45,000 which is the current tax charge for the year. Can you please explain?

Thank you!

“The carrying amount of Hero Co’s property, plant and equipment at 31 December 20X1 was
$310,000 and the tax written down value was $230,000.
The following data relates to the year ended 31 December 20X2:
(1) At the end of the year the carrying amount of property, plant and equipment was $460,000
and the tax written down value was $270,000. During the year some items were revalued
upwards by $90,000. No items had previously required revaluation. In the tax jurisdiction in
which Hero Co operates revaluations of assets do not affect the tax base of an asset or
taxable profit. Gains due to revaluations are taxable on sale.
(2) Hero Co began development of a new product during the year and capitalised $60,000 in
accordance with IAS 38 Intangible Assets. The expenditure was deducted for tax purposes as
it was incurred. None of the expenditure had been amortised by the year end.
The corporate income tax rate is 30%. The current tax charge was calculated for the year as
$45,000.”

1. Selecting your answer from the options below, what amount will be shown as tax payable
in the statement of financial position of Hero Co at 31 December 20X2?

Pull down list
• $45,000
• $63,000
• $72,000
• $75,000