At December 31, 2012, Olsen Real Estate reported a current liability for income tax payable of $150,000.

Question:

At December 31, 2012, Olsen Real Estate reported a current liability for income tax payable of $150,000. During 2013, Olsen earned income of $900,000 before income tax. The company’s income tax rate during 2013 was 29%. Also during 2013, Olsen paid income taxes of $245,000.

How much income tax payable did Olsen Real Estate report on its balance sheet at December 31, 2013? How much income tax expense did Olsen report on its 2013 incomestatement?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...