Deferred Taxes Cadbury Schweppes is a major global company in beverages and confectionery based in London. It is the third largest soft drink company in the world, after Coca-Cola and PepsiCo. More recent sales were more than 5 billion (where is the British pound). The company's income statement included the following, using Cadbury Schweppes' terminology ( in millions): Profit on ordinary activities before taxation Tax on profit on ordinary activities Profit on ordinary activities 830 (255) 575 after taxation As a result of operations, the deferred tax liability account increased by 56 million. Assume there was no change in taxes payable.

1. Compute the income taxes paid to the government. 2. Prepare the journal entry to record taxes on ordinary activities. 3. Explain why the amount of income taxes paid to the government was not the same as the amount of income taxes recorded on the income statement.