Question

Question 4 Pharoah Indonly temporary difference at the beginning and end of 2016 is caused 540,000 ferred for an instant sale of a plant , and the related rec d ada current ) is een m in 2017 and 2018. Ther e ferred taxablity at the beginning of Bevar $1.415.000. te the theater of 2015, and is scheduled to become effective for 2018. T i ncome for 2016 $5.000.000 o n te of o ch Determine the mount reported as a deferred tax at the end of 2016 Derred to LINK TO TENTO TEXT TO TEN TO Prere the many c ry to adjust the y try is required red tatay when the the state of m

Answer 1

Solution: - Existing rate of Taxes = 1416000 / 3540000 = 40% . Amount of deferred tax reability to be reported at the end of 2016 - (1790000 x 40) +(1790000X 347.) = 1309800 Account title & explanation Debit Gredet 106200 106200 Deferred tax teability ale or To Income tax experse [ To record adjustment to deferred tax uability on the basis of New Tax rate enacted] Particulars Amount 5900 000 Income before taxes Income tax expense : Current tax [ 5900000 X 407] Deferred Tax 2360000 -106 200 2753800 Net Income 3646200