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:

Dual Coding

A theory in cognitive psychology suggesting that information can be remembered in both verbal and visual forms, enhancing memory and learning.

Maintenance Rehearsal

A cognitive process that involves repeatedly verbalizing or thinking about a piece of information to keep it in short-term memory longer.

Chunking

A memory technique involving the organization of information into smaller, manageable units or chunks, making it easier to remember.

Primacy Effect

The tendency to remember information at the beginning of a list better than the information that follows.