Amanda Company reported income tax expense of $250,000.Beginning income taxes payable was $30,000,while ending income taxes payable was $25,000,and accounts payable decreased $10,000.How much cash was paid for taxes?

Question

Quizplus · Accepted Answer

The cash paid for taxes can be calculated by adjusting the income tax expense for the change in income taxes payable. The calculation is as follows: Income tax expense ($250,000) + Decrease in income taxes payable ($30,000 - $25,000 = $5,000) = Cash paid for taxes ($250,000 + $5,000 = $255,000). The change in accounts payable is not relevant to the calculation of cash paid for taxes.

Amanda Company Reported Income Tax Expense of $250,000