In its first year of operations Acme Corp. had income before tax of $400,000. Acme made income tax payments totaling $150,000 during the year and has an income tax rate of 40%. What would be the balance in income tax payable at the end of the year?
A)$160,000 credit.
B)$150,000 credit.
C)$ 10,000 credit.
D)$ 10,000 debit.Income tax expense = $400,000 40% = $160,000

Question

Quizplus · Accepted Answer

The income tax expense is $160,000 (40% of $400,000). Since Acme paid $150,000, the balance in income tax payable is $10,000 credit ($160,000 - $150,000).

In Its First Year of Operations Acme Corp