Question

Income tax expense was $175,000 for the year. Income tax payable was $30,000 and $40,000 at the beginning and end of the year, respectively. Cash payments for income tax reported on the statement of cash flows using the direct method is$165,000$215,000$175,000$205,000

Answer 1

$165,000

Step-by-step explanation:

The computation of the cash payments for income tax is shown below:

= Beginning income tax payable + income tax expense - ending income tax payable

= $30,000 + $175,000 - $40,000

= $165,000

We simply added the beginning income tax payable and deduct the ending income tax payable to the income tax expense so that the accurate amount can be computed