Provision for taxation was Rs. 9,000 on 31-03-2017 and Rs. 6,000 on 31-03-2018. Income tax of Rs.5,000 was paid during the year. Then how much provision for taxation should be made during the year?

Rs 8,000

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Rs 2,000

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Rs 6,000

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Rs 9,000

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Solution

The correct option is B
Rs 2,000

Provision made = Closing provision - (Opening provision - Tax paid) = Rs 6,000 - (Rs 9,000- Rs 5,000) = Rs 6,000 - Rs 4,000 = Rs 2,000.

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Similar questions

From the following information, calculate the amount of subscription to be credited to Income and Expenditure Account for the year 2017-18.

Subscription received during the year Rs 1,60,000

Subscription outstanding as at 31-03-2017 Rs 50,000

Subscription outstanding as at 31-03-2018 Rs 12,000

Subscription received in advance on 31-03-2017 Rs 30,000

Subscription received in advance on 31-03-2018 Rs 20,000

Subscription of Rs 5,000 are still in arrears for the year ended on 31-03-2017.

From the followng information, prepare Cash Flow Statement for Dainik Jagran:
$\begin{matrix} Particulars & Note & 31-03-2017 & 31-03-2017 No. & (Rs) & (Rs) I . Equity and Liabilities (1) Shareholder's Funds (a) Share Capital & 5, 00, 000 & 7, 00, 000 (b) Reserve and Surplus & 2, 00, 000 & 3, 50, 000 (2) None-currnt Liabilities Long term Borrowings (12 % b a n k l o a n) & 1, 00, 000 & 50, 000 (3) Current Liabilities (a) Trade Payables & 50, 000 & 45, 000 (b) Other Current Liabilites (Outstanding rent) & 5, 000 & 7, 000 (c) Short Term Provisions & 1 & 80, 000 & 1, 20, 000 Total & 9, 35, 000 & 12, 72, 000 I I . Assets (1) Non-current Assets (a) Fixed Assets Tangible & 2 & 5, 00, 000 & 5, 00, 000 (b) Fixed Assets Intangible & 1, 00, 000 & 95, 000 (c) Non-current Investments & - - - & 1, 00, 000 (2) Currnet Assets (a) Trade Receivables & 80, 000 & 1, 20, 000 (b) Inventories & 50, 000 & 1, 30, 000 (c) Cash and Cash Equivalents & 2, 05, 000 & 3, 27, 000 Total & 9, 35, 000 & 12, 72, 000 \end{matrix}$

Notes to Accounts :
$\begin{matrix} Particulars & 31st March,2017 & 31st March,2018 1. Short-term Provisions Proposed Dividend & 50, 000 & 70, 000 Provision for Taxation & 30, 000 & 50, 000 Total & 80, 000 & 1, 20, 000 2 Fixed Assets Tangible Furniture & 3, 00, 000 & 2, 70, 000 Equipments & 2, 00, 000 & 2, 30, 000 ‘ Total & 5, 00, 000 & 5, 00, 000 \end{matrix}$

During the year, equipment costing Rs 80,000 was purchased. Loss on sale of equipment amounted to Rs 5,000. Depreciation of Rs 15,000 and Rs 3,000 were provided for equipment and furniture respectively.

Prepare Provision for Income Tax Account from the following informations for preparing Cash Flow Statements:
$\begin{matrix} Particulars & 31 - 03 - 2016 & 31 - 03 - 2017 Rs. & Rs. Provision for Income Tax & 3, 20, 000 & 4, 00, 000 \end{matrix}$

Additional Information:
During the year Income Tax paid was Rs. 2,80,000