What Adjustment Is Required to the Opening Deferred Taxes as a Result

question 73

Multiple Choice

What adjustment is required to the opening deferred taxes as a result of the rate change? $$\begin{array} { | l | r | } \hline \begin{array} { l } \text { Opening deductible (taxable) temporary } \\\text { differences }\end{array} & ( 400,000 ) \\\hline \text { Current year deductible (taxable) temporary } & ( 100,000 ) \\\text { differences } & \\\hline \text { Tax rate (prior year) } & 40 \% \\\hline \text { Tax rate (current year) } & 30 \% \\\hline\end{array}$$

• A)30,000 credit
• B)90,000 credit
• C)120,000 credit
• D)150,000 credit

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Definitions:

Agricultural Contract

A contract for the future sale or purchase of agricultural products, such as crops or livestock.

Financial Future

A contract to buy or sell a specified asset at a predetermined price at a specified time in the future, often used to hedge risk or speculate.

Commodity Future

A commodity future is a legally binding agreement to buy or sell a particular commodity asset, or its monetary equivalent, at a predetermined price at a specified time in the future.

Expected Fall

The anticipated decrease in the price or value of an asset or market, often based on current trends, analyses, or market conditions.