The Balance Sheets of Rainbow Ltd Show The Statement of Profit or Loss and Other Comprehensive Income

question 53

Multiple Choice

The balance sheets of Rainbow Ltd show:
$$\begin{array} { c c c } & 31 \text { December 2018 } & 31 \text { December } 2019 \\\text { Current tax liability } & \$ 55000 & \$ 65000\end{array}$$
The statement of profit or loss and other comprehensive income for the year ended 31 December 2019 shows income tax expense of $65 000.
What amount, in respect of income tax paid, will appear in the statement of cash flows for the year ended 31 December 2019? Assume tax is paid annually in arrears and there are no over- or under-provisions of tax.

• A) Nil
• B) $55 000
• C) $65 000
• D) $120 000

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Definitions:

Basidiomycetes

A class of fungi characterized by producing spores on club-shaped structures called basidia, including mushrooms, toadstools, and puffballs.

Dikaryotic

Describing a fungal cell or mycelium with two genetically distinct nuclei per cell, typically found in the life cycle of fungi.

Blastospores

A type of fungal spore produced by budding from a parent cell, common among yeast and other fungal organisms, serving as a means of asexual reproduction.

Ascomycota

A phylum of fungi characterized by the formation of spores in a special type of cell called an ascus.