Income tax liabilities: Corporations are required to estimate their income tax liabilities when the financial statements are prepared because income tax expenses are based on earned income. Liability for tax expenses must be created and settled regularly. The accounting adjustment to correct the ending balance in the income taxes payable account.

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Chapter 11, Problem 22E

1.

To determine

Concept Introduction:

Income tax liabilities: Corporations are required to estimate their income tax liabilities when the financial statements are prepared because income tax expenses are based on earned income. Liability for tax expenses must be created and settled regularly.

The accounting adjustment to correct the ending balance in the income taxes payable account.

2.

To determine

Concept Introduction:

Income tax liabilities: Corporations are required to estimate their income tax liabilities when the financial statements are prepared because income tax expenses are based on earned income. Liability for tax expenses must be created and settled regularly.

The journal entries to record an adjustment to income tax and payment of tax for the fourth quarter.

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