12.The statements of financial position of Rainbow Ltd show:

31 December 2022 31 December 2023

Current tax liability $55 000 $65 000

The statement of financial performance for the year ended 31 December 2023 shows income tax expense of $65 000.

What amount, in respect of income tax paid, will appear in the statement of cash flows for the year ended 31 December 2023? Assume tax is paid annually in arrears and there are no over- or under-provisions of tax.

Group of answer choices

1.$55 000

2.$120 000

3.Nil

4.$65 000