Flexity Corporation, whose income tax rate is 35%, has taxable income of $592,600 and pretax accounting income of $494,000. The entry to record the income tax includes a:

Question

Quizplus · Accepted Answer

The entry to record income tax expense includes a credit to Income Tax Payable for the amount due to the government. In this case, the amount of income tax payable is calculated as taxable income multiplied by the tax rate: 
$592,600 x 35% = $207,410 
Therefore, the correct entry is a credit to Income Tax Payable for $207,410.

Flexity Corporation, Whose Income Tax Rate Is 35%, Has Taxable