Calculate the amount of Tax made to be added to net profits before tax and extraordinary items for the year ended March 31'2023:
Balance Sheet (Extract)
|
Particular |
Note No. |
31 Mar '23 |
31 Mar '22 |
|
Short Term Provision (Provision for tax) |
|
Rs. 80000
|
Rs. 1,10,000
|
Additional Information:
Tax paid during the year 2022-23 was Rs1,20,000.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → 90,000.
Provision for tax in 2022 = 1,10,000
Provision for tax in 2023 = 80,000
Decrease in short term provision = 30,000
Tax paid during the year = 1,20,000
Less: Decrease in short term provision = 30,000
Tax to be added = 90,000
Provision for Taxation Account
| Particulars | Amount (₹) | Particulars | Amount (₹) |
| By Bank A/c (Tax paid during the year) |
1,20,000 | By Balance b/d | 1,10,000 |
| By statement of profit & loss | 90,000 | ||
| To Balance c/d | 80,000 | ||
| 2,00,000 | 2,00,000 |