The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is:
A)A Above.
B)B Above.
C)C Above.
D)D Above.

Question

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% is: 
A)A Above. 
B)B Above. 
C)C Above. 
D)D Above.

Quizplus · Accepted Answer

The adjusting entry to recognize income taxes due on a profit of $100,000 and a tax rate of 40% would be to debit Income Tax Expense for $40,000 and credit Income Taxes Payable for $40,000. Choice A shows the correct accounts and amounts for this adjusting entry.

The Adjusting Entry to Recognize Income Taxes Due on a Profit