A e Y l 31% O 12:45LTEabcSAVEТextPenBrushA company has a Deferred Tax Asset of$35,000. Now, the government has justchanged the statutory tax rate from 35% to30% effective immediately.What is the correct journal entry to recordthe impact of this tax rate change?Dr. Deferred Tax Assets5000Cr. Income Tax Payable5000Dr. Income Tax Payable5000Cr. Deferred Tax Assets5000Dr. Income Tax Expense5000Cr. Deferred Tax Assets5000Dr. Income Tax Expense5000Cr. Income Tax Payable5000Dr. Deferred Tax Assets5000Cr. Income Tax Expense5000ВIU< >!!!!!!

Journal entry use to record the transactions/events that occurred in a business in order to keep…

A company has a Deferred Tax Asset of $35,000. Now, the government has just changed the statutory tax rate from 35% to 30% effective immediately. What is the correct journal entry to record the impact of this tax rate change?

A company has a Deferred Tax Asset of $35,000. Now, the government has just changed the statutory tax rate from 35% to 30% effective immediately. What is the correct journal entry to record the impact of this tax rate change?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

A e Y l 31% O 12:45
LTE
abc
SAVE
Тext
Pen
Brush
A company has a Deferred Tax Asset of
$35,000. Now, the government has just
changed the statutory tax rate from 35% to
30% effective immediately.
What is the correct journal entry to record
the impact of this tax rate change?
Dr. Deferred Tax Assets
5000
Cr. Income Tax Payable
5000
Dr. Income Tax Payable
5000
Cr. Deferred Tax Assets
5000
Dr. Income Tax Expense
5000
Cr. Deferred Tax Assets
5000
Dr. Income Tax Expense
5000
Cr. Income Tax Payable
5000
Dr. Deferred Tax Assets
5000
Cr. Income Tax Expense
5000
В
I
U
< >
!!!
!!!

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Sheridan Corporation reported $230000 in revenues in its 2021 financial statements, of which $91100 will not be included in the tax return until 2022. The enacted tax rate is 40% for 2021 and 35% for 2022. What amount should Sheridan report for deferred income tax liability in its balance sheet at December 31, 2021? O $55560 O $48615 O $36440 O $31885
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