Question
(1)Pruett Corporation began operations in 2015 and appropriately recorded a deferred tax liability at the end of 2015 and 2016 based on the following depreciation
(1)Pruett Corporation began operations in 2015 and appropriately recorded a deferred tax liability at the end of 2015 and 2016 based on the following depreciation temporary differences between pretax financial income and taxable income:
Income Tax
Financial
Year
Depreciation
Depreciation
Difference
2015
$8,000
$4,000
$4,000
2016
6,000
4,000
$2,000
2017
4,000
4,000
0
2018
2,000
4,000
-2000
2019
0
4,000
-4000
The income tax rate for 2015 and 2016 was 30%. In December 2017, Congress enacted an income tax rate of 21%. What is the journal entry required to adjust the Deferred Tax Liability account in December 2017?
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Lawrence Tomassini
5th Edition
0077282078, 9780077282073
