At the end of the second quarter, Fenwick SA had recognised 520,000 of income tax expense (26% of EUR 2,000,000 of year-to-date profit before tax). In the third quarter, it records a loss before tax of EUR 300,000, so that year-to-date profit before tax at 30 September is 1,700,000, and it revises the estimated annual effective rate to 24 % (case data, judgement). Case convention: deferred tax excluded. Record the entry for the income tax expense of the third quarter.
- Year-to-date profit before tax at 30 September
- 1,700,000
- Revised estimated annual effective rate (case data)
- 24 %
- Income tax expense already recognised at the end of June
- 520,000