Madhu Corp. receives rent in advance of $100,000 in Year 1. The timing difference is expected to reverse $40,000 in Year 3 and $60,000 in Year 4. The enacted tax rates are 30% in Year 1 and Year 2. In Year 2, the tax laws are changed, and the new enacted tax rate for Year 3 and thereafter is 40%. Which of the following entries would be included in the journal entry to adjust the deferred tax account at December 31, Year 2?

Madhu Corp. receives rent in advance of $100,000 in Year 1. The timing difference is expected to reverse $40,000 in Year 3 and $60,000 in Year 4. The enacted tax rates are 30% in Year 1 and Year 2. In Year 2, the tax laws are changed, and the new enacted tax rate for Year 3 and thereafter is 40%. Which of the following entries would be included in the journal entry to adjust the deferred tax account at December 31, Year 2?

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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Follow US Tax procedure for calculations. posting for second time , previous wrong. if it is wrong , downvote sure and review will be given to the bartleby.
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