An extract from the trial balance of RRR Ltd as at 30 June 2011 shows: Income tax expense $20,000 If the income tax provided for at the end of 2013 was $16,000 and taxation is paid in arrears in a lump sum, what amount will appear in the cash flow statement for taxation paid by RRR Ltd for the year ended 30 June 2014?
A) $20,000
B) $16,000
C) nil
D) $12,000

Question

Quizplus · Accepted Answer

The cash flow statement will show the amount of tax paid during the year. Since taxation is paid in arrears, the amount provided for at the end of 2013 ($16,000) would be paid in the year ended 30 June 2014.

An Extract from the Trial Balance of RRR Ltd as at 30