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tax comp in accounts

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  • 11-12-2012 6:39pm
    #1
    josvill2010
    Registered Users Posts: 157 ✭✭


    I hope you can help me with this query
    What is the best way to account for CT on the accounts
    1 First year of operation
    Dr PnL
    Cr Tax accrual

    2. Second Year trading

    Pmt of tax bill
    Dr PnL (for any small differences)
    Dr Tax accrual
    Cr Bank

    Pmt of preliminary tax (based on last years figures)
    Dr PnL
    Cr Bank

    Accrue again for this year tax
    Dr PnL
    Cr Tax accrual

    What am i doing wrong?


Comments

  • Options
    #2
    Bobby1984
    Registered Users Posts: 267 ✭✭Bobby1984


    Payment of preliminary tax has nothing to do with the P&L. It should be
    Dr CT Paid/Tax Accrual
    Cr Bank

    (I presume this is a college/school question rather than practice but if it is practice, have you looked into CT exemption for start up companies)


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