A Company Has a Deferred Tax Liability of $112,500 at the Beginning

question 17

Essay

A company has a deferred tax liability of $112,500 at the beginning of the fiscal year relating to a taxable temporary difference of $450,000. The tax rate for the year increased from 25% to 35%.
Required:
Provide the journal entry to reflect the tax rate change.

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Definitions:

Traditional Environment

A setting or condition characterized by long-established practices and methods, often resistant to change.

Pull Manufacturing

A production strategy where work is initiated based on demand, aiming to minimize inventory levels and reduce waste by producing only what is needed at the right time.

Actual Customer Orders

The real and documented requests by customers for goods or services from a company.

Pull Manufacturing

A production strategy where work is initiated based on customer demand, as opposed to pushing inventory based on projected demand.