The draft statement of profit or loss of Hedley plc for the year ended 31 March 20X3 shows an income tax expense of £55,000. The draft statement of financial position shows a noncurrent liability of £280,000 for deferred tax, but does not show a current tax liability.

Tax on the profit for the year ended 31 March 20X3 is estimated at £260,000. The figure in the draft statement of profit or loss is the under-provision for the year ended 31 March 20X2. The carrying amount of Harrington’s net assets at 31 March 20X3 is £1.4 million more than their tax base on that date. Assume a tax rate of 25%. LO5 Required:

Restate the figures which should appear in relation to taxation in the company’s statement of profit or loss for the year ended 31 March 20X3 and in the statement of financial position at that date..