Accounting Online Program Certification Practice Test

What amount should appear for tax payable in Pluto Ltd's statement of financial position?

1. £67,900

2. £64,500

3. £3,400

4. £60,000

The correct answer is: £67,900

To determine the amount that should appear for tax payable in Pluto Ltd's statement of financial position, it's crucial to consider the context in which tax payable is reported. Tax payable refers to the amount a company owes to the tax authorities for a particular accounting period, and it is typically calculated based on the taxable income along with any applicable tax rates and adjustments for prior periods. The amount of £67,900 likely reflects the appropriate calculation of taxable income, including potential deductions, credits, and any previous underpayments or overpayments considered for the current period. This figure might also encompass any additional adjustments required by tax regulations or specific accounting policies relevant to Pluto Ltd. Other amounts presented may be based on incomplete data or miscalculations concerning the company's tax liabilities. To arrive at a proper tax payable amount, it is essential to perform thorough tax planning and compliance, ensuring that all financial and tax records are accurate and up to date. Thus, choosing £67,900 as the tax payable demonstrates a comprehensive understanding of the tax obligations incurred by the company for the reporting period.