327 Income Taxes Payable
Liabilities
Accrued
Synopsis
Account 327 is established to record the amount of current Income Taxes payable or accrued.
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Debits |
Credits |
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Example 1
Record the monthly accrual of federal and state income taxes in the amount of $93,750.
Journal: Standard Entries Journal
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Entry: |
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Debit |
Credit |
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Account 099 |
Income Taxes – Current Year |
$93,750 |
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Account 327 |
Income Taxes Payable |
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$93,750 |
Example 2
Record the payment of the 2nd quarter federal income taxes in the amount of $183,000.
Journal: ACH (Automated Clearing House)
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Entry: |
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Debit |
Credit |
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Account 327 |
Income Taxes Payable |
$183,000 |
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Account 202 |
Cash in Bank |
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$183,000 |
Comments
A credit balance represents unpaid federal, state and local income taxes.