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Staples Inc., was accounting for its inventory using the LIFO method prior to 2014. In 2014, it changed to FIFO. The company decided to use
Staples Inc., was accounting for its inventory using the LIFO method prior to 2014. In 2014, it changed to FIFO. The company decided to use the same method (LIFO) for income tax purposes. The tax rate enacted is 30%. Income before taxes under both the methods for the past three years appears below. 2013 2014 LIFO $300,000 $200,000 FIFO 500,000 250,000 Which of the following will be included in the journal entry made by Staples to record the tax effect? Group of answer choices A debit to deferred tax liability for $75,000 A credit to deferred tax liability for $75,000 A credit to deferred tax liability for $60,000 A debit to deferred tax liability for $60,000
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