Tori Co has the following extracted information in its statement of profit or loss and statement of financial position for the years ended 31 December 20X3 and 31 December 20X2. Statement of profit or loss extract 31 December 20X3 $000 Depreciation 3,000 Loss on disposal of asset 1,500 Tax 900 Statement of financial position extract 31 December X3 31 December X2 $000 $000 Property plant and equipment 27,000 32,000 Intangible assets 13,000 11,500 Tax 2,750 2,375 What is the cash flow for tax paid in operating activities for the year ended 31 December 20X3?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Tori Co has the following extracted information in its statement of profit or loss and
Statement of profit or loss extract 31 December 20X3 $000
Loss on disposal of asset 1,500
Tax 900
Statement of financial position extract 31 December X3 31 December X2
$000 $000
Property plant and equipment 27,000 32,000
Intangible assets 13,000 11,500
Tax 2,750 2,375
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