Labor expenses $1,550,000 Material costs $785,000 Depreciation Office supplies Debt interest expenses Rental expenses Proceeds from the sale of old cranes $332,500 $15,000 $42,200 $45,000 $43,000

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.