3. CAVERN CO. Current Tax Deferred Tax 900 Dr 4,000 Cr A provision for income tax for the year ended 30 September 2010 of $5,600 is required. The balance on current tax represents the under/over provision of the tax liability for the year ended 30 September 2009. At 30 September 2010 the tax base of Cavern's net assets was $15,000 less than their carrying amounts. The movement on deferred tax should be taken to the income statement. The income tax rate of Cavern is 25%. 5:46 PM