When I write off inventory, depending on the reason I need to also deduct the tax I paid from the Tax Payable account.
I buy an item for $100 with 12% tax, Inventory on Hand increases by $100 and tax payable decreases by $12.
Writing off the inventory decreases the Inventory on Hand account and increases the account I have written it off to, but the Tax Payable remains the same.
In some cases when I write this item off, the tax should also be charged to the account I am writing the item off to. So the Tax Payable should increase by $12, and the account I am writing off to should be charged $112 not $100.
How do I account for this?