Income tax expense for the year was $372,000.Income taxes payable decreased by $34,000 during the year, resulting in an ending balance of $71,000.How much cash was paid for income taxes during the year?

Question

Quizplus · Accepted Answer

The cash paid for income taxes is calculated by adjusting the income tax expense for the change in income taxes payable. Since income taxes payable decreased by $34,000, it means that more cash was paid than the expense recorded. Therefore, cash paid = Income tax expense + Decrease in income taxes payable = $372,000 + $34,000 = $406,000.

Income Tax Expense for the Year Was $372,000