Balancing allowance and Tax entry

SSalman9y ago

Dear, We make the following entry at financial year end: Dr. Income tax expense Cr. Deferred tax payable Cr. Current tax payable We make the following entry for Capital allowance for tax purposes at financial year end: Dr. Capital allowance Cr. Accumulated capital allowance If there is Balancing allowance on disposal of an asset, then the entry will be: Dr. Accumulated capital allowance Dr. Balancing allowance Cr. Asset Cr. Cash Please check and let me know if I need any correction. Thanks,

John MoffatTutor9y ago#1

I don't know whether or not you expect me to answer (this forum is for students to help each other and if you want me to answer then you should ask in the Ask the Tutor Forum). However, the debits and credits are completely irrelevant for Paper F9 and so is deferred tax. None of it can possibly be asked in F9 - it is a financial management exam, not a financial accounts exam :-) (The entries you have written are not correct, but you should ask in the F7 or P2 forums if you are concerned about them for some reason.)

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