3. Pixie Pic has the following projected information: Year ended 31 December Profit before depreciation Capital allowances depreciation E E E 2018 270,000 86,400 28,800 2019 259,200 17.280 69,120 2020 237,600 17,280 51,840 2021 216,000 120,960 34,560 The tax rate for Pixie Pic is 30%. There is no deferred tax balance brought forward as at 1 January 2018. Required: (a) What is deferred tax? Define permanent and temporary differences in relation to deferred tax. (4 marks) (b) Explain the three main approaches to accounting for deferred taxation. (6 marks) (c) Show the tax and deferred tax in the income statements and the deferred tax in the statements of financial position for Pixie Plc for the years 2018 to 2021 under the flow through method and the full provision method. (10 marks) Total 20 marks