Holmes has the following balances included on its trial balance at 30 June 20X4: Taxation Deferred...

 

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Holmes has the following balances included on its trial balance at 30 June 20X4: Taxation Deferred taxation $ 7,000 16,000 Credit Credit The taxation balance relates to an overprovision from 30 June 20X3. At 30 June 20X4, the directors estimate that the provision necessary for taxation on current year profits is $12,000. The balance on the deferred tax account needs to be increased to $23,000, which includes the impact of the increase in property valuation below. During the year Holmes revalued its property for the first time, resulting in a gain of $10,000. The rate of tax is 30%. What is the charge for taxation that will appear in the statement of profit or loss for the year to 30 June 20X4? Holmes has the following balances included on its trial balance at 30 June 20X4: Taxation Deferred taxation $ 7,000 16,000 Credit Credit The taxation balance relates to an overprovision from 30 June 20X3. At 30 June 20X4, the directors estimate that the provision necessary for taxation on current year profits is $12,000. The balance on the deferred tax account needs to be increased to $23,000, which includes the impact of the increase in property valuation below. During the year Holmes revalued its property for the first time, resulting in a gain of $10,000. The rate of tax is 30%. What is the charge for taxation that will appear in the statement of profit or loss for the year to 30 June 20X4?

Answer rating: 100% (QA)

Tax on current year profits Increase in deferred tax liability Tax ... View the full answer