A Company Has a Deferred Tax Liability of $120,000 at the Beginning

question 32

Essay

A company has a deferred tax liability of $120,000 at the beginning of the fiscal year relating to a taxable temporary difference of $300,000. The current year tax rate is 20%.
Required:
Provide the journal entry to reflect the tax rate change.

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Definitions:

Medicare, Medicaid

Federal programs in the United States that provide health coverage; Medicare is for people over 65 or with certain disabilities, and Medicaid is for low-income individuals and families.

Malpractice Insurance

A type of professional liability insurance that protects healthcare providers against claims of negligence or incompetence.

Economic Growth

A growth in an economy's ability to generate goods and services over different time periods.

Standard Workweek

Refers to the officially set or commonly accepted number of working hours per week for full-time employment in a specific jurisdiction or organization.