Question: Give the Journal entries for the "grossing up" of the following payments:
(a) Interest paid net on £50,000 6% Debentures for the year 1961.
(b) Net income from investments during 1961-£690. (Tax is 7/9 in the £)
For some years, the Adjo Trading Company Ltd. has made provision in its books for taxation based on all profits earned to the Balance Sheet date. On the 1st October, 1959, the following balances appeared on the Income Tax account
Schedule D 1959-60 £6,100
Schedule D 1960-61 £9,000
The 1959-60 assessment was paid on the due date. The 1960-61 assessment was finally agreed at £8,100. Give the Income Tax Account for the year to 30th September, 1960 and the relevant entries in the Profit & Loss Account and Balance Sheet at that date. The 1961-2 assessment was estimated at £7,500.