Otlay Ltd prepares accounts to 31 July each year. The company’s for the year to 31 July 2017 showed a liability for current tax of £120,000. This was an estimate of the current tax due for the year to 31 July 2017. The following information is also available:
(a) The current tax due for the year to 31 July 2017 was finally agreed with the tax authorities to be £127,000 and this sum was paid on 1 May 2018.
(b) The company estimates the amount of current tax due for the year to 31 July 2018 to be £140,000.
Prepare a current tax ledger account for the year to 31 July 2018, showing the amount of the current tax expense for that year and the amount of the current tax liability as at the end of the year.
