Clausius
Ltd. made four quarterly payments of $3,200 each to the CRA during 2011 as
instalment payments on its estimated 2011 tax liability. At year end,
Clausius’s controller completed the company’s 2011 tax return, which showed
income taxes of $20,000 for its 2011 income. Prepare a summary entry for the
quarterly tax instalments and the year-end entry to recognize the 2011 income
taxes. Identify any year-end balance sheet amount that is related to income
taxes and indicate where it would be reported.
|
Income Tax Expense......................
|
12,800
|
|
|
Cash
($3,200 X 4)..................
|
|
12,800
|
|
Income Tax Expense ($20,000 – $12,800)..
|
7,200
|
|
|
Income
Taxes Payable...............
|
|
7,200
|
At year end, the
company would report Income Taxes Payable of $7,200 in current liabilities.
