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Cash/tax

28 August 2008 1,436 views No Comment

Hi all!

Can you tell me the journal entry of this prblem…

Goods sold Rs.10000
Discount on cash payment 5%
Add tax 4%

Plz journalize it!

Sales                    10.000 Credit
Sales discounts          500 Debit
Tax payable               380 Credit
Cash                      9.880 Debit

Is this IFRS related? Or is this an accounting course exercise?

Cagri Gurses wrote:

Agree with the below. However, not sure if he means 4% tax on the 10k or
inclusive in the 10 k. If over and above, then theJEs could look like this
as shown below (broken down for easy understamding). I dont think if it is
inclusive in the 10k that the sales amount should reflect the gross of tax
included amount.

Discount Allowed 500
Cash/Bank 9,500
To Sales (10,000) (Also, do not forget to include the
measures of unit to be credited from inventory, if doing computerized JE)
(To record Cash Sales)

Cash/Bank 400
To Taxes Payable (400)
(To record taxes owed on sales)

Taxes Payble (Remit) 400
To Cash/Bank (400)
(To record tax remittance)

Hope this helps.

Shibaji

Ur required entry is

Party Ac 9917

Discount 500

Sale 10000

Tax payable 417

I would like to know whether Fund Managers consolidate their mutual funds in their balance sheet even if the holding of fund manager is not significant in the funds say 10%.

Further I would also like to know whether banks who have holding in Funds manager are required to consolidate mutual funds as they have indirect holding in the fund.

Regards,

Shahid

No, based on investment guidelines under US GAAP (industry guidelines) the Fund Manager will not consolidate the investment fund,

Kind regards,

Henk

Sales Cr 10000
tax Cr 400
Cash a/c 9900
Discount 500

From where I can download investment guidelines under US GAAP referred to by
Madan Mohan?

Sales                   Dr 10,000
Sales discounts      Dr    500
Tax payable             Cr  380
Cash                      Dr 9,880

–
Best Regards,
Ravi

Kindly determine first if the Sales of 10,000 is inclusive or exlusive of the 4% tax.

However, the JE should be:

Cash (amount of cash received) xxx

Sales Discount (5%) xxx

Sales(exclusive of tax) xxx

Tax Payable(4%) xxx

Sales 10.000 Credit

I have not found all the guidelines (they are scattered around many
standards, there is a standard booklet summarizing all of it, look at
AICPA.com (they have a shop to buy the book, it ha ‘Investment Companies’ in
the name) or amazon.com) but here is a nice comparison between IFRS, US
GAAP and Canadian GAAP, see the section consolidation model, use this link

http://www.pwc.com/extweb/pwcpublications.nsf/docid/CFF01AF62A27FAFD85257376
005E42D0

Hope this helps,

Henk