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estimated income tax for year x0 is 75000
income tax paid for x0 =80000
estimated income tax for x1 = 83000bear with me please:
Income Tax Payable ————————-DR——————————-CR
estimated for x0 —————————————————————–75000
paid for x0 ————————————-80000
estimated for x1 —————————————————————–83000so according to the T account, the answer shd be 78000
but if we use the working:
Estimated ——————— x ——- 83000
under—————————–x ———5000
——————————————————-
tax expense for the year—–x———88,000where am i going wrong in the T account?
The 83,000 is on the wrong side.
It’s a debit above the total lines and a credit below the total lines
If you had completed the debits and credits with a narrative you may have seen that for yourself.
75,000 is “brought down” from last year (last year it was above the total lines on the debit side)
80,000 narrative is “Cash”
83,000 is “carried down”
And then you can total the bigger side (in this case the debit side). Put the total 163,000 in the total line.
Put the same figure (163,000) in the total line on the credit side. then add up the credit side and put in the missing figure (88,000) to make the credit side add up to 163,000
The narrative for the 88,000 is PorL A/c
Mansoor, this is basic double entry debits and credits and “balancing the accounts” If you need a refresher, look at John’s videos for F3
u r right … i always forget the below the total line thing.. thank u for making it clear
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