Phillips Corporation sold a fixed asset used in its operations for greater than its carrying amount. Phillips should report the transaction in the income statement using the:   A. Gross concept, showing the proceeds as part of revenues and the carrying amount as part of expenses in the continuing operations section of the income statement.   B. Net concept, showing the total amount as a component of other comprehensive income, net of taxes.   C. Net concept, showing the total gain as part of discontinued operations, net of taxes.   D. Net concept, showing the total gain as part of continuing operations , not net of taxes.

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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.