Accounting entry for payment after 31 march

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This query is : Resolved

Akhilesh (Querist)

24 April 2012 Our co. maintain 2 accounts for transporter 1 for inward freigth 2 for outward freigth. Due to oversite in March 2012 we deposit service tax for only 1 account i.e freight outward & the other one is paid on 21 April 2012. Now problem arise is what is the accounting entry for this situation as service tax payble account is to be NIL on 31/3/2012 but in our case there is a credit balance for which payment is made in April 2012.

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)

24 April 2012 Any expenses/income either omitted partially or fully can be said as prior period items.

Your case balance sheet has already been closed, so adjustments are required to retained earnings and tax liability.

For this you need to pass

DEBIT :Retained Earnings(Bal)
DEBIT: Provision for income tax(applicable
rate*service tax)

Credit :service tax ( you have already paid the service tax)

You need to show the same at Notes on accounts( effect on EPS etc)

Akhilesh

Akhilesh (Querist)

25 April 2012 In my opinion 2 FY is effected by this transaction (1)FY 2011-12 (2) FY 2012-13
& therefore 2 entries will be passed

FY 2011-12
Service Tax Payable Dr
Prov for ST Liability Cr

FY 2012-13
Prov for ST Liabiliy Dr
Bank Cr

CA Dileep Surya Kumar

CA Dileep Surya Kumar (Expert)

25 April 2012 please observe the answer, It will not effect current year profit.

No problem,Even it shows credit balance as payable.

Now you need to pass entry

DEBIT:Service tax payable
CREDIT:Bank
on the date of payment.

Before I understood that, you were not at all created any liability for service tax payable,hence I have given answer accordingly.

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