Corporate taxes are due in four estimated quarterly payments on April 15, June 15, September 15, and December 15. However, for the purposes of this ABC illustration, we will assume that estimates are not paid, and that the tax is paid in full on the return's March 15, 2015 due date.

ABC's income tax rate is 40%.The entire year's income tax expense was estimated at the beginning of 2014 to be $69,600, so January through November income tax expense recognized amounts to $63,800 (11/12 months).

Since we are assuming estimates are not made during the year, the balance in Income taxes payable represents tax accrued for January through November.Assume no deferred tax assets or deferred tax liabilities.

Based on the income before income taxes figure from the income statement, record December's income tax expense so that the entire year's total tax expense is correct.