Urgent Help on Practice Assessment 2

Dewan

Hi there,
I am unsure how to calculate the following adjustment.
Please see the provided screenshot.


Many Thanks in Advance

Pian32

So a couple of items:
1. The tax already paid needs to be moved from the purchases into the tax for the year.
2. The estimate needs a provision added for the difference in what has already been paid. so £1,200,000 to tax for the year as a debit and the same to the Corporation tax Creditor.
3. The over provision will be a debit to Corporation tax creditors and a credit to corp tax for the year.

In relation to the trial balance and the financial statements

This will reduce your purchases by £3,000,000
Set the Tax value to (£3,000,000+1,200,000 - 150,000) = £4,050,000
Leave a creditor for corp tax of (150,000+1,200,000-150,000) = £1,200,000 (What is still owed for the year)

I hope this helps