Addison Co. has one temporary difference at the beginningof 2017 of $500,000. The deferred tax liabilityestablished for this amount is $150,000, based on a taxrate of 30%. The temporary difference will provide thefollowing taxable amounts: $100,000 in 2018, $200,000in 2019, and $200,000 in 2020. If a new tax rate for 2020of 20% is enacted into law at the end of 2017, what isthe journal entry necessary in 2017 (if any) to adjustdeferred taxes?

Q: Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes…

A: JOURNAL ENTRIES Journal Entry is the First stage of Accounting Process. Journal Entry is the Process…

Q: In 2024, Dark Knight Inc. had taxable income of $125,000. Dark Knight had one permanent difference…

A: Timing differences are the differences between the timing of when an item is recognized in taxable…

Q: Blue Spruce Corporation has a taxable temporary difference related to net book value versus UCC of…

A: The objective of the question is to calculate the deferred tax asset or liability for Blue Spruce…

Q: Wicks Corporation began operations on January 1, 2016. At the end of 2016, Wicks reported pretax…

A: 1) Event DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT 1 31-Dec-16 Income tax expense Dr…

Q: Compute taxable income and income taxes payable for 2025. Taxable income $ Income taxes payable $

A: Temporary difference refers to the variation between the taxable income and the pretax financial…

Q: SUNLAND CORPORATION HAS ONE TEMPORARY DIFFERENCE AT THE END OF 2020 THAT WILL REVERSE AND CAUSE…

A: Income tax expense represents the amount of income tax that a company or individual recognizes and…

Q: At December 31, 2025, Sheffield Corporation had a deferred tax liability of $362,100, resulting from…

A: Journal entry is the first stage of accounting process.Journal entry used to record business…

Q: Ferrero Rocher Inc.’s only temporary difference at the beginning and end of 2020 is caused by a…

A: In the context of the given question, we are required to compute the deferred tax liability on…

Q: In 2021, the company accrued wages payable $68,000 and will make the payment in 2022.   Taxable…

A: Adjusted taxable income=Taxable income-Accrued wages=$600,000-$68,000=$532,000

Q: In late 2017 the federal tax rate for subsequent years was decreased from 35% to 21%. How would this…

A: Deferred tax liability: Deferred tax liability is created, if the tax obligation (income tax…

Q: In its 2021 income statement, Crane Corp. reported depreciation of $3600000 and interest revenue on…

A: Deferred tax liability is the amount of liability that arises on account of differences in items as…

Q: Under the Special COVID tax provisions in 2020, Basalt Corporation elected to defer a portion of…

A: The question is asking about the repayment schedule for deferred payroll taxes under the special…

Q: vanhoe Corporation reported $202000 in revenues in its 2021 financial statements, of which $68,000…

A: SOlution: Deferred income tax liability = Future taxable amount * Tax rate of 2022

Q: At the end of 2019, Sentry Company reported a deferred tax liability of $12,350 based on an income…

A: Given Information: Deferred tax liability = $12,350 Income tax rate = 26% Changed income tax rate =…

Q: Sherrod, Inc., reported pretax accounting income of $100 million for 2021. The following information…

A: Compute the amounts to record income tax as follows: Result:

Q: Estimated Tax Requirement. Zeta Corporation's taxable income for 2019 was $1.1 million, on which…

A: a. Since Zeta corporation is a large taxpayer it should pay its quarterly estimated tax payment of…

Q: 1. & 2. Determine the type of accounting change and prepare the appropriate journal entry to record…

A: Introduction:- Deferred tax liability arises due to timing difference in the value of assets as per…

Q: On December 31, 2020, Knight Industries had a deferred tax asset account with a balance of $65…

A: Deferred tax is a notional asset or liability to reflect corporate income taxation on a basis that…

Q: Kingbird Corporation began 2020 with a $55,200 balance in the Deferred Tax Liability account. At the…

A: Deferred tax liability = cumulative temporary difference x tax rate -  balance in the Deferred Tax…

Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $50 million…

A: Solution 1: Payne Industries Journal Entries Event Particulars Debit (In Million) Credit (In…

Q: A company prepared the following reconciliation for 2021:   Pretax financial income for 2021…

A: Particulars Amount Pretax financial income for 2021   $719000 Originating temporary difference…

Q: On December 31, 2023, XYZ Inc. has an account payable of $2,000 for operating expenses incurred…

A: The entity pays taxes on profit and tax liability is dependent upon the taxable income and filing…

Q: At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $120 million…

A: A journal entry is utilized to record a business deal in a company's accounting records. A journal…

Q: Four Square Services Corporation estimates that its 2021 taxable income will be $1,000,000. Thus, it…

A: Given:Estimated taxable income for 2021=$1000000Liability=$210000To compute:Minimum quarterly…

Q: During 2020, Sheffield Co.'s first year of operations, the company reports pretax financial income…

A: Deferred tax asset: A Deferred Tax Asset is an asset on a Company's balance sheet that may be used…

Q: At the beginning of 2021, a company had future deductible amounts of $400,000 and the enacted tax…

A: Future deductable amount = 400000*27% = $108000 Amount that need to be deductable due to change in…

Q: At the end of 2019, Sentry Company reported a deferred tax liability of $9,724 based on an income…

A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…

Q: Example 5-6 Park Company has a $70,000 federal and state taxable payroll and has earned a reduced…

A: FUTA A federal tax imposed on employers to fund unemployment benefits managed by the federal…

Q: Carla Corporation has a cumulative temporary difference related to depreciation of $556,000 at…

A: When the tax paid (as per the tax code) is less than the tax calculated in the income statement…

Q: Force Corporation has one temporary difference at the end of 2020 that will reverse and cause…

A: A journal entry is the first step—and an essential function—of the accounting process. Journal…

Q: At December 31, 2020 Sunland Corporation reported a deferred tax liability of $210000 which was…

A: When there is taxable temporary difference arise between the income as per accounts and income as…

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.