Addison Co. has one temporary difference at the beginning of 2012 of $500,000. The deferred tax liability

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Addison Co. has one temporary difference at the beginning of 2012 of $500,000. The deferred tax liability established for this amount is $150,000, based on a tax rate of 30%. The temporary difference will provide the following taxable amounts: $100,000 in 2013, $200,000 in 2014, and $200,000 in 2015. If a new tax rate for 2015 of 20% is enacted into law at the end of 2012, what is the journal entry necessary in 2012 (if any) to adjust deferred taxes?

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Intermediate Accounting

ISBN: 978-0470587287

14th Edition

Authors: kieso, weygandt and warfield.

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