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Calculate tax liabilities in statement of financial position

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Reference no: EM132958955

For the year ended 31 July 2017 Glomar Bay Distributors Limited (GDL) made taxable trading profits of $7,200,000 on which income tax is payable at 25%.

  • A transfer of $70,000 will be made to the deferred taxation account. The balance on this account was $210,000 before making any adjustments for items listed in this paragraph.
    The estimated tax on profits for the year ended 31 July 2016 was $160,000, but tax for that year has now been agreed at $125,000.
    Tax on profits for the year to 31 July 2017 is payable on 1 May 2018.
    In the year to 31 July 2017 the company made a capital gain of $740,000 on the sale of property. This gain is taxable at a rate of 30%.

Problem 1: Calculate the tax charge for the year to 31 July 2017.

Problem 2: Calculate the tax liabilities in the statement of financial position of GDL as at 31 July 2017.

Reference no: EM132958955

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