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:

Pyruvate Molecules

Organic compounds that play a key role in metabolic pathways, particularly glycolysis, where glucose is broken down to produce energy.

ATP

Adenosine triphosphate, a high-energy molecule that stores and supplies the cell with needed energy for various functions.

NADH

Nicotinamide adenine dinucleotide (reduced form) is a coenzyme involved in redox reactions, carrying electrons from one reaction to another in metabolic processes.

Citric Acid Cycle

A process where aerobic organisms produce energy by oxidizing acetate from carbohydrates, fats, and proteins into carbon dioxide through a sequence of chemical reactions.