Tax Summary Income Including Debt Transactions/Director Loan

#1

Hoping someone can explain for me why when producing my GST calculation sheet and Tax Summary, the SALES income amount is incorrect, it is including any DEBIT transactions that were made during the period from the Directors Loan account.

My Profit and Loss (cash basis) shows income of $11,174 (ex GST) but my BAS sheet and Tax Summary show income of $30,275.55 (Incl GST) which includes all sales as per P&L but also a capital purchase of a car and any transactions on the Directors Loan account for the period. Can someone point me in the right direction?

Many thanks,

Rebecca.

#2

What type of transactions occurred on the Directors Loan Account ?
If they were just cash movements then make sure that those transactions don’t have the Tax Field set as GST.

#3

Is was simply purchases made by me personally and recorded as journal entries that added to the Directors Loan amount owing to me. I will check the GST fields.

Thanks!

#4

Purchases for the business or personal purchases ?
Why were Journals used ?

#5

Business Purchases. Journal entries used as I had to credit the Directors Loan account so I couldn’t ‘spend money’.

#6

Ok, the credits (and debits) to the Directors Loan Account shouldn’t have GST attached to that leg of the Journal. The Business Expense (purchase) leg should only have GST attached.

#7

OK I have done that and the final figure is now correct, thank you!

Just curious though…my net sales is now showing $11,174.55 of GST income, which is correct, and all the Directors Loan transactions showing as $17,983.55 of GST Free income. Is that how it is supposed to report? I am still a little confused as to why these transactions are being reported as ‘Sales’ I guess.

#8

Those Director Loan Transaction should have “no” tax allocation at all (left blank), not GST Free. GST Free is used for Interest, Dividend etc. type incomes

#9

Right! Thanks for your help!