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Question - During the year ended31/12/2003, A Ltd. had estimated the corporation tax for the year to be £100,000. The amount was still outstanding as at 31/12/03. During the year ended 2004, on 30th June the actual amount payable was agreed with the tax authorities and eventually paid. Meanwhile during the year 2004, the company paid additional investment taxes of £80,000. As at the end of the year the company the company estimated that he payable for year 2004 will be £120,000.
Required: Compute the income tax expense and the balance sheet liability for year 2004 assuming that;
The actual tax paid for year 2003 was £90,000.
The actual tax paid for year 2003 was £110,000.
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