Chapter 11, Problem 15E

To determine

Estimated Liability:

Income tax payable is an estimated liability based on historical events of a company. It is a provision created to recognize the income tax expense during a particular accounting period.

To determine:

1. Compute the amount of accounting adjustment to produce ending balance in the Income Taxes Payable account.

2. Prepare journal entries to record

(a) Adjustment to the Income Taxes Payable on December 31, 2015.

(b) The payment of the fourth-quarter taxes on January 20, 2016.