For the current year,Southern Cross Company reported income tax expense of $45,000.Income taxes payable at the end of the prior year were $20,000 and at the end of the current year were $27,000.The deferred tax liability classified as noncurrent that resulted from the use of MACRS for tax purposes and straight-line depreciation for financial reporting purposes increased from $18,000 at the beginning of the current year to $23,000 at the end of the current year.How much cash was paid for income taxes during the year?

Question

Quizplus · Accepted Answer

The cash paid for income taxes is calculated as: Beginning Income Taxes Payable ($20,000) + Income Tax Expense ($45,000) - Ending Income Taxes Payable ($27,000) - Increase in Deferred Tax Liability ($5,000) = $33,000.

For the Current Year,Southern Cross Company Reported Income Tax Expense