At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax rate was 27%. In October 2021, a new income tax act is
At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax rate was 27%. In October 2021, a new income tax act is
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax rate was 27%. In October 2021, a new income tax act is signed into law that lowers the tax rate to 20% for 2022 and future years. To record the change, the company will (enter 1, 2, 3, or 4 that represents the correct answer):
- Credit Income Tax Expense by $28,000.
- Debit Income Tax Expense by $28,000.
- Credit
Deferred Tax Liability by $28,000. - Debit
Deferred Tax Asset by $28,000.
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