Langtry Corporation Began Operations in 2009 and Appropriately Recorded a Deferred

question 19

Multiple Choice

Langtry Corporation began operations in 2009 and appropriately recorded a deferred tax liability at the end of 2009 and 2010 based on the following depreciation temporary differences between pretax financial income and taxable income: $\begin{array}{rrr}& \text { Income Tax } & \text { Financial } \\\text { Year } & \text { Depreciation } & \text { Depreciation }\\2009 & \$ 800 & \$ 400 \\2010 & 600 & 400 \\2011 & 400 & 400 \\2012 & 200 & 400 \\2013 & 0 & 400\end{array}$
The income tax rate for 2009 and 2010 was 30%.In February 2011, due to budget constraints, Congress enacted an income tax rate of 35%.The journal entry required to adjust the Deferred Tax Liability account in February 2011 would be

• A)
• \(\begin{array}{llr}
• \text {Loss on Adjustment of Deferred Taxes } &30\\
• \text { Deferred Tax Liability} &30\\
• \end{array}\)
• B)
• \(\begin{array} { l l }
• \text { Deferred Tax Liability } & 30 \\
• \text { Gain on Change in Tax Rates } &&30
• \end{array}\)
• C)
• \(\begin{array} { l r }
• \text { Income Tax Expense } & 10 \\
• \text { Deferred Tax Liability } && 10
• \end{array}\)
• D)
• \(\begin{array}{l}
• \text { Income Tax Expense } \quad 30\\
• \text { Deferred Tax Liability } \quad 30
• \end{array}\)

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Definitions:

Bedpan

A receptacle used by bedridden patients for the collection of urine and feces when they are unable to use the bathroom.

Digital Removal

A medical procedure involving the manual extraction of feces from the rectum, often used in cases of severe constipation.

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Accumulation of hardened fecal material in the rectum or sigmoid colon.

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A procedure involving the introduction of tap water into the colon through the rectum to stimulate bowel movement and relieve constipation.