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Question · Scope and tax effects of retrospective adjustments

A batch of goods worth 75,000 was left out of Kairia's inventory count at 31 December 2023; 2024 is the earliest period presented. The correction creates a taxable difference at a rate of 25 % (case data). Record the entries correcting the 2024 opening balances.

Omitted inventories
75,000
Tax rate
25 %
Your answer
  1. Line 1

    Account Inventories

  2. Line 2

    Account Retained earnings

  1. Line 1

    Account Retained earnings

  2. Line 2

    Account Deferred tax liability

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