Mechatronic Bogie Ltd

question 28

Multiple Choice

Mechatronic Bogie Ltd., whose income tax rate is 35%, has taxable income of $482,000 and pretax accounting income of $566,000. The entry to record the income tax includes a:

• A) credit to Income Tax Expense for $198,100
• B) credit to Income Tax Payable for $168,700
• C) credit to Income Tax Payable for $198,100
• D) debit to Income Tax Payable for $168,700

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Definitions:

Common Stock

Constitutes a type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Stock Subscription Plan

A method through which a company offers its shares to investors or employees ahead of the general public, often at a discount or with preferential terms.

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, which may differ from its market value.

Installments

Regular payments made over a period of time to pay off a debt.