327 – Taxes Payable – Income

Current Liabilities

Accrued Liabilities

Synopsis

Account 327

Debits

Credits

  1. Payments of federal, state, and local income taxes.

 

  1. The unpaid balance of federal, state, and local income tax liability for the previous taxable year.

  2. Amounts that may be assessed as a result of audits of prior years' tax returns.

  3. The estimated income tax on the current year's taxable income.

 

Remarks:

Income taxes should be paid on or before the required due date to avoid penalties.

It is recommended that sub-accounts, on separate general ledger sheets, be used to record each accrued income tax.  The total of these sub-accounts should be combined for reporting on the Subaru Dealer Financial Statement.

The income tax liability in this account at the end of the taxable year should be based upon the actual tax liability indicated on the tax returns prepared for submission.

Prior year income taxes still owed should be displayed in the Memo Prior Year on Page 1 Line 17 on the Subaru Dealer Financial Statement.

Note: