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Bakersfield Corporation pays income tax at an average rate of 3 5 percent. This year its revenue is $ 1 0 2 , 0 0

Bakersfield Corporation pays income tax at an average rate of 35 percent. This year its revenue is $102,000 and its expenses are $71,000. The adjusting entry to record the income tax expense will:
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decrease liabilities by $10,850.
increase net income by $10,850.
decrease net income by $31,000.
decrease net income by $10,850.

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