SUBJECT:ANALYSIS OF FINANCIAL STATEMENTS

Question 5: Otlay Ltd prepares accounts to 31 July each year. The company's financial statements for the year to 31 July 2015 showed a liability for current tax of 120,000. This was an estimate of the current tax due for the year to 31 July 2015. The following information is also available: (a) The current tax due for the year to 31 July 2015 was finally agreed with the tax authorities to be 127,000 and this sum was paid on 1 May 2016 . (b) The company estimates the ameunt of current tax due for the year to 31 July 2016 to be 140,000. Required: Prepare a current tax ledger account for the year to 31 July 2016 , showing the amount of the current . tax expense for that year and the amount of the current tax liability as at the end of the year. Question 5: Otlay Ltd prepares accounts to 31 July each year. The company's financial statements for the year to 31 July 2015 showed a liability for current tax of 120,000. This was an estimate of the current tax due for the year to 31 July 2015. The following information is also available: (a) The current tax due for the year to 31 July 2015 was finally agreed with the tax authorities to be 127,000 and this sum was paid on 1 May 2016 . (b) The company estimates the ameunt of current tax due for the year to 31 July 2016 to be 140,000. Required: Prepare a current tax ledger account for the year to 31 July 2016 , showing the amount of the current . tax expense for that year and the amount of the current tax liability as at the end of the year