Bakersfield Corp.pays income tax at an average rate of 30 percent.This year its revenue is $145,000 and its expenses are $101,500.The adjusting entry to record the income tax expense will:

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The related adjusting entry will increase liabilities (Income Tax Payable)and also increase expenses (Income Tax Expense)by $13,050 [or ($145,000 - $101,500)× 30%].The increase to expenses will decrease net income and,as a result,stockholders' equity.