On January 1,2010,Starlight Company's Balance Sheet Reported a Deferred Tax

question 17

Essay

On January 1,2010,Starlight Company's balance sheet reported a deferred tax liability of $185,000 and a deferred tax asset of $99,900.The future taxable amounts that existed as of January 1,2010 will reverse equally over the next four years beginning in 2010,while the future deductible amounts that existed as of January 1,2010 will reverse equally over the next three years beginning in 2010.The enacted income tax rate for all tax years as of January 1,2010 was 37%.On February 1,2010,the tax laws were amended resulting in income tax rates of 38% for 2010 and 2011; the income tax rate will be 40% for tax years 2012 and later.
Required:
Prepare the journal entry on February 1,2010 to record the impact of the amended income tax rates. 

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Definitions:

Societal Impact

The effect of an action or organization on the larger community or society, encompassing social, economic, and environment aspects.

Gifted

Possessing high intelligence (an IQ of 130 or higher) and/or superior talent in a particular area.

Superior Talent

An exceptional or outstanding ability in a particular area or domain, significantly surpassing the average individual's capabilities.

IQ

Intelligence quotient, a measure of a person's intellectual abilities in relation to the average performance of individuals in a given age group.