Ask Allan Forum
Get expert answers to your tax questions straight from Allan, our owner and experienced CPA. It’s free, direct, and designed to help you make the best decisions when it comes to your taxes.
Hello Allan,
I have prepared my 2019 financial statement and balance sheet for my small business corporate return.
I just need clarification on how to document the income tax and HST for the year.
I made installment payments of $4000 for HST and $2000 for Income tax during 2019.
Total HST payable for 2019 is $4057 and for Income tax payable $2840
Total HST payable $4057 minus installment of $4000, balance owing $57
Total Income tax payable $2840 minus installment of $2000, balance owing $840
Where do I show these amounts on the balance sheet.
The HST liability account on the balance sheets is made up of these 3 amounts:
1. HST collected (credit amount)
2. HST paid on business expenditures (debt amount)
3. HST installments paid to the CRA during the year (debit amount)
Therefore, the HST liability on the balance sheet should be equal to the HST collected (1), less the sum of the HST paid, and HST installments (2 +3).
The Corporate income tax liability account on the balance sheet is made up of these 2 amounts:
1. Corporate income tax expense for the current year (credit amount)
2. Corporate income tax installment payments made as of the year-end (debit amount)
Therefore, the corporate income tax liability on the balance sheet should be equal to the corporate income tax expense less than the installments paid.