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# Assume that after recording all adjusting entries (except in

Assume that after recording all adjusting entries (except income taxes), Elite's income before income taxes amounts to \$7,500. Also assume Elite is a corporation subject to income taxes of 40% of income before income taxes. Which of the following statements is correct?
1. Elite need not accrue any more income taxes expense for February since the unadjusted trial balance already contains an income tax liability of \$4,100.
2. Elite's net income for February is \$4,500.
3 Elite's February 28 balance sheet should report income taxes payable of \$3,000.
4 Elite's income taxes expense for February is \$7,100.

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Assume that after recording all adjusting entries (except income taxes), Elite's income before income taxes amounts to \$7,500. Also assume Elite is a corporation subject to income taxes of 40% of income before ...

#### Solution Summary

Assume that after recording all adjusting entries (except income taxes), Elite's income before income taxes amounts to \$7,500. Also assume Elite is a corporation subject to income taxes of 40% of income before income taxes. Which of the following statements is correct?
1. Elite need not accrue any more income taxes expense for February since the unadjusted trial balance already contains an income tax liability of \$4,100.
2. Elite's net income for February is \$4,500.
3 Elite's February 28 balance sheet should report income taxes payable of \$3,000.
4 Elite's income taxes expense for February is \$7,100.

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