Examlex
B Co.reported a deferred tax liability of $24 million for the year ended December 31,2015,related to a temporary difference of $60 million.The tax rate was 40%.The temporary difference is expected to reverse in 2017 at which time the deferred tax liability will become payable.There are no other temporary differences in 2015-2017.Assume a new tax law is enacted in 2016 that causes the tax rate to change from 40% to 30% beginning in 2017.(The rate remains 40% for 2016 taxes. )Taxable income in 2016 is $90 million.
Required:
Determine the effect of the change and prepare the appropriate journal entry to record B's income tax expense in 2016.What adjustment,if any,is needed to revise retained earnings as a result of the change?
Q30: On December 31,2015,Belair Corporation had 100,000 shares
Q42: Fred's Fine Roasted Coffee<br>Fred's Fine Roasted Coffee
Q49: Ben's Delivery Company<br>Ben's Delivery Company reports the
Q53: The estimated medical costs are expected to
Q55: Malone,an auto mechanic,left his $35,000-a-year job at
Q57: What is the effect of the error
Q72: Estimating flexible selling expense budget and computing
Q117: Listed below are the reporting classifications for
Q127: How do U.S.GAAP and International Financial Reporting
Q154: When stock is issued for consideration other