4-7. For each of the multiple choice questions below, select the appropriate adjust-ing journal entry that would be recorded at the end of the year (December 31). 2. Suppose that the Farmers estimated on December 31 that they owed income tax for $3,670. They will pay their taxes in February next year. They did not owe any income taxes at the beginning of the year. 3 a. Taxes Payable $ 3,670.00 4 Change in Taxes Payable $ 3,670.00 5 b. Taxes Payable $ 3,670.00 6 Cash $ 3,670.00 7 C. Change in Taxes Payable $ 3,670.00 8 Taxes Payable $ 3,670.00 9 d. No entry is required under the accrual-adjusted approach 10 The Farmers determine that the amount of current deferred taxes at the end of the year is $2,000. No current deferred taxes existed at the beginning of the year. 11 12 a. Change in Taxes Payable $ 2,000.00 13 Current Deferred Taxes $ 2,000.00 14 b. Current Deferred Taxes $ 2,000.00 15 Change in Taxes Payable $ 2,000.00 16 C. Change in Taxes Payable $ 2,000.00 17 Taxes Payable $ 2,000.00 18 d. No entry is required under the accrual-adjusted approach. 19 20