Question

Randolph Ltd has a tax expense of £77,000 in the Income Statement for the year ended...

Randolph Ltd has a tax expense of £77,000 in the Income Statement for the year ended 31 December 2019. In the Statement of Financial Position, tax payable was £70,000 for the year ended 31 December 2018 and £79,800 for the year ended 31 December 2019.

What amount will appear as tax paid in the Statement of cash flows for the year ended 31 December 2019?

a. £79,800

b. £77,000

c. £70,000

d. £67,200

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Homework Answers

Answer #1

Answer to the given question is d. £67,200.

Explanation:

We now that:

Closing Tax Payable = Opening Tax Payable + Tax Expenses for the year - Payment of taxes during the year

Putting the given figures in the above question:

£78,800 =  £70,000 + £77,000 - Payment of taxes during the year

Therefore, Payment of taxes during the year = £70,000 + £77,000 - £77,700

Hence, Payment of taxes during the year = £67,200

Therefore, £67,200 will be the amount that will appear as tax paid in the Statement of cash flows for the year ended 31 December 2019.

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