tax

In the Tax Account you will need to make a provision for the liability which is estimated to be payable based on this year’s profits. The estimated amount is entered into the tax account on the debit side with the narrative “Carried forward” and, below the total lines in the tax account, on the credit side, the same amount is entered with the narrative “Brought forward” That figure is the tax liability as at the year end and will appear in the SoFP as a current liability

Now, balance off the tax account ( there will be other figures in there such as a brought forward liability from last year, a payment made this year and a transfer from the deferred tax account ) and, with the balancing figure ( which is the tax expense / tax charge for the year ) you will

Dr Income statement with the tax charge for the year
Cr The Tax account with that same figure