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:

Municipal Solid Waste

Municipal solid waste refers to the everyday garbage or trash produced by households, businesses, and institutions within a municipality.

Hazardous Wastes

Materials that pose potential risks to public health or the environment due to their toxic, corrosive, or flammable properties, requiring special disposal methods.

Perpetual Storage

the concept of storing something indefinitely, often used in the context of waste management or carbon sequestration.

Incineration

The process of burning waste materials to reduce their volume and mass and sometimes to generate energy, though it can produce harmful emissions.