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Hello sir.
Cud u tell me the journal entry for the following
Tom has a unrecorded deferred tax liability of 1million which was unchanged at 30 September 2014(year end)
Can u pls explain how I get the journal for this
Is it Dr.coi
Cr.provisionCarry down in the deferred tax account from above the line debit to below the line credit the amount of 1m
That now has created the obligation – the credit amount below the line will be on the sofp
Now balance off the deferred tax account (add up the bigger side, same figure on the other side, put in the figure that makes the smaller side add up to the same total as the bigger side total, and double enter that missing figure to the current tax account (in your example, that’s put in the credit side above the line $1m to make it balance and debit that $1m to the current tax account.
Now balance off the current tax account and double enter that missing figure to the statement of profit or loss
So, we established the obligation higher up in this post and now we have established the charge (debit) to the statement of profit or loss
Does that lot make sense to you?
Yes… But how will I do the adjustment in a consolidation question. Cud u tell the journal
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