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income taxes payable represent amounts owed to various governmental entities based on the companys income it increases when the company earns income and estimates the taxes it will have to pay on it it decreases when the company makes the required tax payments company a began the month owing ten thousand dollars in taxes to the government during the month it sent seven thousand dollars to the government of the amounts it owed thus decreasing the income taxes payable so were down to three thousand dollars now this month it earned additional income resulting in two thousand dollars of estimated taxes we were down to three thousand dollars but we increased it by another two thousand dollars that puts us up to five thousand dollars in income taxes payable
