Question

Exercise 9-15B Accounting for Income taxes LO P4 Nishi Corporation prepares financial statements for each month-end. As part of its accounting process, estimated income taxes are accrued each month for 29% of the current month's net income. The income taxes are paid in the first month of each quarter for the amount accrued for the prior quarter. The following information is available for the fourth quarter of the year. When tax computations are completed on January 20 of the following year, Nishi determines that the quarter's Income Taxes Payable account balance should be $31189 on December 31 (its unadjusted balance is $28,289). October net icon November net income December net income $35.000 22,750 30,00 1. Determine the amount of the accounting adjustment (dated as of December to produce the proper ending balance in the income Taxes Payable account 2. Prepare journal entries to record the December 31 adjustment to the income Taxes Payable account and the later January 20 payment of the fourth quarter taxes Complete this question by entering your answers in the tabs below. Recured 1 Required 2 Determine the amount of the accounting adjustment (dated as of December 31) to produce the proper ending balance in the Income Taxes Payable account Roundermediate calculation to the rest whole dom

Answer 1

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Nishi Corporation
Answer 1	Amount $
Income tax payable for quarter 4	31,189.00
Less: Unadjusted balance in Income tax payable account	28,289.00
Accounting adjustment to be done as on Dec 31	2,900.00
Answer 2 Journal Entry	Account	Debit $	Credit $
For Accounting adjustment as on Dec 31	Income tax Expense	2,900.00
	Income tax payable		2,900.00
For payment of Quarter 4 taxes on Jan 20	Income tax payable	31,189.00
	Cash		31,189.00