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I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?

I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?
Transcribed Image Text:I am working on a homework assignment and a question states that a $1500 expense was not previously considered when calculating the businesse's income tax expense. I am supposed to make an adjusting entry for this situation. I am uncertain as to whether or not I increase income tax expense and income tax payable or decrease income tax expense and income tax payable. I am leaning more towards it would increase their taxable income, therefore increasing income tax expense and income tax payable. If this is the case, could you explain in more detail why this is the case?
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