An organisation owes £300,000 tax at 1.7.X4 and £450,000 at 30.6.X5. Its income statement for the year to 30.6.X5 includes a tax charge of

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  1. An organisation owes £300,000 tax at 1.7.X4 and £450,000 at 30.6.X5. Its income statement for the year to 30.6.X5 includes a tax charge of £400,000. How much tax was actually paid in the year to 30.6.X5?
  2. An organisation buys a tangible non-current asset for £200,000. It has an estimated scrap value of £20,000 and an expected useful economic life of 10 years.
    • What depreciation will be shown in the income statement for year 3?
    • How would the non-current asset be shown in the statement of financial position at the end of year 3?
    • If the asset is sold for £120,000 in year 4, how will this affect:
      • the income statement for year 4?
      • the statement of financial position at the end of year 4?
    • How will the sale of the tangible non-current asset affect the firm’s statement of cash flows?

Be sure to demonstrate your numerical workings.