Question

Sneed Corporation reported balances in the following accounts for the current year: Beginning Ending Income tax payable $ 54 $ 34 Deferred tax liability 75 145 Income tax expense was $231 for the year. What was the amount paid for taxes?

Answer 1

Answer:

$181

Explanation:

Given that,

Beginning:

Income tax payable = $54

Deferred tax liability = $75

Ending:

Income tax payable = $34

Deferred tax liability = $145

Tax expenses during the year = $231

Amount of tax paid during the year:

= Tax expenses during the year + (Beginning - ending tax payable) - (Ending - Beginning deferred tax liability)

= $231 + ($54 - $34) - ($145 - $75)

= $231 + $20 - $70

= $181