The following information was taken from the records of Skysong Inc. for the year 2025: Income tax applicable to income from continuing operations $168.300, income tax applicable to loss on discontinued operations $22,950, and unrealized holding gain on available-for-sale debt securities (net of tax) $13,500. Gain on sale of equipment Loss on discontinued operations Administrative expenses Rent revenue Loss on write-down of inventory $85,500 67,500 216,000 36,000 54,000 00.000 Cash dividends declared Retained earnings January 1, 2025 Cost of goods sold Selling expenses Sales revenue $135,000 1,080,000 765,000 270,000 1,710,000

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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.