Cullumber Inc.'s only temporary difference at the beginning and end of 2016 is caused by a $3,240,000 deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2017 and 2018. The related deferred tax liability at the beginning of the year is $1,296,000. In the third quarter of 2016, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2018. Taxable income for 2016 is $5,400,000, and taxable income is expected in all future years.<\/p>
<\/p>
<\/p>
<\/p>
Determine the amount reported as a deferred tax liability at the end of 2016.<\/p>
<\/p>
Prepare the journal entry necessary to adjust the deferred tax liability when the new tax rate is enacted into law.<\/p>
<\/p>
Draft the income tax expense portion of the income statement for 2016. Begin with the line \"Income before income taxes.\" Assume no permanent differences exist.<\/p>", "transcribed_text": "", "related_book": { "title": "Managerial Accounting Tools for Business Decision Making ", "isbn": "1118856996, 978-1118856994", "edition": "4th Canadian edition", "authors": "Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1190.jpg", "uri": "\/textbooks\/managerial-accounting-tools-for-business-decision-making-4th-canadian-edition-1190", "see_more_uri": "" }, "free_related_book": { "isbn": "0387981756", "uri": "\/textbooks\/the-economics-of-sustainable-development-the-case-of-india-2009th-edition-978-0387981758-285756", "name": "The Economics Of Sustainable Development The Case Of India", "edition": "2009th Edition" }, "question_posted": "2024-06-28 07:19:25", "see_more_questions_link": "\/study-help\/questions\/business-marketing-2022-June-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/use-edgar-to-find-the-most-recent-10k-of-a", "description": "Use EDGAR to find the most recent 10-K of a company of your choosing. Go to that companys website, and view the same document. 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