A company's Income Tax Payable account decreased from $14 million to $12 million during the year.If its income tax expense was $80 million,what would be shown as cash paid for income taxes under the direct method?

Question

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The decrease in Income Tax Payable from $14 million to $12 million indicates that $2 million less was owed at the end of the year. Given an income tax expense of $80 million, the cash paid for income taxes would be the expense plus the decrease in the payable account, totaling $82 million.

A Company's Income Tax Payable Account Decreased from $14 Million