I have been looking around the forum for answers but I couldn’t find anything applicable to my situation.
It’s a fresh business with just three BAS cycles all up. It’s worth mansion I am on a cash basis.
I would like to clear my TAX PAYABLE account to the end of March (last Bas quarter). Clearing tax payable account should provide me accurate figures each BAS cycle of liabilities or refund being displayed on a main login page of my desktop version. It’s easier than creating actual report.
My last BAS payment I have entered by going to the cash accounts and spend money: screen print below.
Shouldn’t my payment of $178 take the GST balance to ($200.93 less $178 =) $22.93?
(as I mentioned I have not cleared this account before therefor we have carry over balance).
Second question is refering to clearing procedure.
As of end of March my TAX PAYABLE account display fallowing positions. I have market red line last entry for March q.
To clear my TAX PAYABLE account as of 31 March should I create general journal entry as showed below or is there a better way of doing this?
No. The payment produces a debit to Tax payable. It correctly shows in the debit column and drives the account balance in the debit direction. (Remember, Tax payable is a liability account. What shows under the Liabilities heading on the Summary page as a positive number shows in the format of the drill-down report as a negative number. I can’t comment on whether the account shows things correctly overall, but the effect of this one transaction is right.
Absolutely not. Tax payable represents an obligation to pay money (or receive money if ATO owes you). So it can only be cleared by spending or receiving money from a cash account. You can do neither with a journal entry. And your capital account should not enter into the picture at all.
As general guidance, your idea of “clearing” the account so the Summary tab gives you a picture of current status has several flaws:
This will work only if the pace of your transactions is so slow that your tax filings are entered and clear before other transactions come in to muddy the picture.
Since you are on cash basis, the proper way to accomplish what you want is to change the displayed date range for the Summary using Set period.
Finally, your screen shots reveal your software needs to be updated.
What is of more interest is the fact (based on your screenshots) that you were due for a refund of 202.52 as at the end of the Dec quarter yet you paid 178.00. Why?
At the end of the Mar quarter you were due a refund of 231.47
On the BAS, are you paying other taxes such as PAYG or instalment income tax as well as the GST, if yes, then those amounts should be separated out and allocated to different accounts, not posted to the Tax Payable account.
If you had received that refund due, then that would have naturally “cleared” the balance.
Thank you so much for your prompt response and comments.
I have updated manager and delete my general journal entry leaving tax payable balance as it was carry over by the software.
Tut: I completely agree. Once GST is payable to ATO, using cash spend method will debit tax payable accounting bringing balance to ‘nil’ for the end of quarter. Therefor keeping tax payable account at the correct balance. The same apply in reverse for ATO refund.
Saying this is not my case. Please have a look on BAS calculation report for the quarter ended dec16
Report clearly shows liability of $178 which have been feed to the ATO and paid. Where I have made a mistake?
I would suggest that you need to go back to a earlier BAS, as the problem possibly occurred prior to the Dec Qtr. The end of quarter balance of the Tax Payable account should match the GST worksheet.
Therefore if (?) the Sep Qtr Tax Payable account balance and GST worksheet do match, then there are rouge transaction(s in the Tax Payable account during the Dec Qtr amounting to 380.52
As an aside, if you aren’t requiring multi-currency then you could turn the Base Currency off and that will remove all the “A$” clutter on the screens.
