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Provisional balance sheet

A/c entries 2211 views 4 replies

Hello Friends,

Plz tell me that

In a private limited company, while making its provisional balance sheet as on mid of the year, whether provision for tax is created for the current year or not ?? OR net profit will be left without taxation.

Plz help me. Its urgent.

Thanks

Replies (4)
provision for taxation is must but it must be shown with proportion for the mid.year.

Yes, Proportionate tax on estimated income will be made.

As per profit you should calculate the tax and make a provision for tax in the balance sheet.

Dear

The followoing methods can be adopted. 1) If the company has a budget in the beginning of the year based on Budget - Profit estimation Advance Tax/Provision can be made.2) If the Co. does n't hv budget find out the Gross Sales in the mid Year  & arrived at the expected Closing Sales Vs Closing Expenses then derive the Expected Profit and anlayse for Tax Provision, Of course it will be + or - which will not going toaffect much at the year end.


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