1. Accrual of prepaid income on a monthly or quarterly basis:
Borrow: Income tax expense.
Credit: Tax Payable -- Corporate Income Tax Payable.
2. When paying quarterly income tax in advance:
Borrow: Tax payable - Corporate income tax payable.
Credit: Bank deposits.
3. The annual income tax payable shall be settled before May 30 of the new year minus the amount of tax prepaid, and the positive number is the amount of tax payable
Debit: Profit and loss adjustments for prior years.
Credit: Tax Payable -- Corporate Income Tax Payable.
4. Pay the annual final settlement and pay the tax
Final settlement of enterprise income tax
Borrow: Tax payable - Corporate income tax payable.
Credit: Bank deposits.
5. Redistribution of profits:
Debit: Profit distribution - undistributed profit.
Credit: Prior Year Profit and Loss Adjustment.
6. If the annual income tax payable is calculated to be less than the amount of tax withheld:
Borrow: Tax payable - Corporate income tax payable.
Credit: Prior Year Profit and Loss Adjustment.
7. Redistribution of profits:
Debit: Profit and loss adjustments for prior years.
Credit: Profit Distribution - Undistributed Profits.
8. The overpaid tax shall be refunded with the approval of the tax authorities.
Borrow: Bank deposit.
Credit: Tax Payable -- Corporate Income Tax Payable.
9. No tax refund will be processed for the overpaid income tax, which will be used to offset the prepaid income tax in the next year.
Borrow: Income tax expense.
Credit: Tax Payable - Corporate Income Tax Payable.
10. When an enterprise finds that it has overcharged expenses and undercounted earnings in the previous year, it shall prepare accounting entries
Debit: Profit distribution - undistributed profit.
Credit: Prior Year Profit and Loss Adjustment.
Debit: Profit and loss adjustments for prior years.
Credit: Tax payable - Income tax payable.