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ABC, Inc. estimates that its current year income tax will be $8,000. Based on this estimate,...

ABC, Inc. estimates that its current year income tax will be $8,000. Based on this estimate, it will make four quarterly payments of $2,000 each. What are the dates these are due? Make the journal entry for the first quarterly estimated payment.   

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Answer #1

Paying quarterly tax out of estimated yearly tax is actually reduces tax burden when it is due.

Dates are as below:

15th April in case for the quarter January to March

15th June in case for the months 1st April to 31st May

15th September in case for the quarter June to August

15th January coming year, in case for the periods 1st September to 31st December

There are 4 quarters in a year. The amount in each quarter would be ($8,000 / 4 =) $2,000.

Journal

Date

Account titles & explanations

P.ref

Amount

Amount

15th April

Income tax expense

$2,000

   Cash

$2,000

To record payment of estimated income tax on quarterly basis
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