In 20X8 Darton Co had taxable profits of $120,000. In the previous year (20X7) income tax on 20X7 profits had been estimated as $30,000.
Required
Calculate tax payable and the charge for 20X8 if the tax due on 20X7 profits was subsequently agreed with
the tax authorities as:
(a) $35,000; or
(b) $25,000.