postin of transaction

This query is : Resolved

deepak Kumar yadav (Querist)
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18 July 2009 in the current year i have make a provision for tax of Rs. 50,000 and paid advanced Tax of Rs.40,000 tell me the effect of transaction that is provision will show on P&l dr and B/s Liabilities what about advanced Tax Paid? post the entry for provision for tax and Advanced Tax separately

Guest

Guest (Expert)

18 July 2009 Entries :-

1). At the time of provision :-

Taxes - (P & L A/c) - Dr
To Provision for Tax (Other C.Liabil) - Cr

2). At the time of Payment :-

Advance I. Tax (F.Yr.09-10) - (Other current Assets) - Dr
To Bank A/c - Cr

3). At the time of F.year close :-

Provision for Tax (Other C.Liab) A/c - Dr
To Advance I. Tax (F.Yr. 09-10) - (Other C.Assets) - Cr

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Expert)
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18 July 2009 Advance Tax Paid is shown as loan & advances under current asset in Asset side of balance sheet.
Now entry is
Income Tax Dr 50000
Provision for tax cr 50000

Advance Tax Paid A/c Dr. 40000
To cash/Bank cr. 40000/-

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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18 July 2009 Seems Mr.Bansal's view is appropriate.

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