The accrual-basis tax expense in the income statement is $60 000, the beginning balance in the current tax liability account is $50 000 and the ending balance is $70 000. What is the amount of tax paid to be included in the statement of cash flows for the year?

Question

Quizplus · Accepted Answer

The tax paid for the year is the difference between the current tax liability from the beginning to the end of the year. Therefore, tax paid = ending current tax liability - beginning current tax liability = $70,000 - $50,000 = $20,000.

The Accrual-Basis Tax Expense in the Income Statement Is $60