A Company Has a Deferred Tax Liability of $60,000 at the Beginning

question 11

Essay

A company has a deferred tax liability of $60,000 at the beginning of the fiscal year relating to a taxable temporary difference of $300,000. The tax rate for the year increased from 20% to 25%.
Required:
Provide the journal entry to reflect the tax rate change.

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Definitions:

Test Period

A specific duration of time designated for the purpose of conducting tests, assessments, or experiments to evaluate performance, effectiveness, or reliability.

Histogram

A graphical representation of the distribution of numerical data, usually shown as bars of different heights.

Positively Skewed

Describes a distribution of numerical data where the right tail is longer or fatter than the left, indicating that the majority of values are concentrated on the left side of the distribution.

Negatively Skewed

Describes a distribution where the tail is on the left side of the distribution, indicating that the majority of data points are concentrated on the right side.