Ask Question
9 May, 19:48

At December 31, 2014, Fell Corporation had a deferred tax liability of $680,000, resulting from future taxable amounts of $2,000,000 and an enacted tax rate of 34%. In May 2015, a new income tax act is signed into law that raises the tax rate to 40% for 2015 and future years. Prepare the journal entry for Fell to adjust the deferred tax liability. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

+1
Answers (1)
  1. 9 May, 22:59
    0
    Dr Income Tax Expense 120,000

    Cr Deferred Tax Liability 120,000

    Explanation:

    Deferred tax liability can be defined as the tax liability which has been due for the current period but has not yet been paid such as installment sales receivable.

    Fell Corporation journal entry for to adjust the deferred tax liability

    Dr Income Tax Expense 120,000

    Cr Deferred Tax Liability 120,000

    $2,000,000 x. 4 = $800,000

    $800,000 - $680,000 = $120,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “At December 31, 2014, Fell Corporation had a deferred tax liability of $680,000, resulting from future taxable amounts of $2,000,000 and an ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers