The ACCA Learning Community
Home
119 online now

Balancing allowance and Tax entry

0 Votes
Balancing allowance and Tax entry

Dear,

  1. We make the following entry at financial year end:
    Dr. Income tax expense
    Cr. Deferred tax payable
    Cr. Current tax payable

  2. We make the following entry for Capital allowance for tax purposes at financial year end:
    Dr. Capital allowance
    Cr. Accumulated capital allowance

  3. 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,

February 18th 2017 AN ACCA USER 140 Points

Please log in or register to reply to this question.

...