Bibliography and Appendix Questions 2022

Running head: TAXATION
TAXATION
Name of the Student
Name of the University
Author Note

1
TAXATION
Table of Contents
Answer to Question no 2.................................................................................................................2
Bibliography....................................................................................................................................4
Appendix..........................................................................................................................................5

2
TAXATION
Answer to Question no 2
2.1 –
AS per IAS 12 current tax for the current period will be recorded as a liability for the
amount which is not settled and will be recorded as an asset for the amount which is paid in
excess than the due amount. Therefore, the current tax of 66,600 will be recorded as a liability up
to the amount that has not been settled yet. Current tax will be measured at the value that is
expected to be paid or recovered from tax authorities using the rates and laws which are
applicable to the company as on balance sheet date.
In the given case there is creation of deferred tax asset of 6600 which is being recorded
for “deductible temporary differences.” The deferred tax asset/liability is recorded at the tax rates
which are applicable at the time of asset being realized or when the liability is settled on the basis
of law and taxes rates that are applicable at the end of the reporting period.
2.2
The necessary journal entries for recording current and deferred tax in the financial statements of
Parmesan Limited is as follows and the workings are attached in Appendix –
Parmesan Limited
Journal entries
Particulars Debit Credit
Income Taxes 66,600
Income Tax
due 66,600
Deferred Tax 6,600