Journal Entry Paid Income Tax

The business paid to have the damage repaired and later the employee reimbursed the business with a check from her insurance company.

Journal entry paid income tax. Accounting and journal entry for income tax is done in a distinct way for different types of business establishments i e. The company s tax accountant determines that the company s revenue for the period under tax accounting rules equals 48 million while its allowable expenses are 23 million. To recognize additional taxes owed to the federal government bokssnel company would make the following adjusting entry. The debit to the income tax expense account increases your expenses.

Thus the company owes 36 000to the federal government. Private limited companies. Debit income tax expense 14 250. Add your answer and earn points.

Accrued income tax journal entry example shows how to record an estimated income tax expense due on profits of a business at the end of an accounting period at the end of an accounting period one of the adjusting entries is to accrue for estimated income tax payable due on the profits of the business. But in computation of income we see a couple of other. Debit income tax payable 14 250 00 credit bank account 14 250 00 in the event that income tax instalments of say 15 000 00 have been paid in advance we account for the expected refund by doing the following journal. It shows that you paid the tax.

What is the journal entry for paid income tax 1 see answer madhushreechatp6s0qq is waiting for your help. Profit before tax 100 tax 30 9 100 30 9 100 30 9 profit after tax 69 1 the above is what we see in profit and loss account. It shows that you have less cash after paying the tax expense. The credit to the cash account reduces your assets.

Thus in 20x3 bokssnel s tax liability was 136 000 400 000 x 0 34 while the company has only paid 100 000 in income taxes. Sole proprietorship partnership and private limited company. Insurance journal entry questions question 1 an employee of our small business damaged our property with her car. Make an accounting entry for tax refund.

Since tax accounting rules are different than the financial accounting rules net income for the income tax purpose is different than the financial accounting net income.