Read Industries reported a defferred tax liability of 8.7 million for the year e

Question

Read Industries reported a defferred tax liability of 8.7 million for the year ended December 31, 2017, related to a temporary difference of 29 million. The tax rate was 30%. The temporary difference is expected to reverse in 2019 at which time the deferred tax liability will become payable. There are no other temporary differerences. Assume a new tax law is enacted in 2018 that causes the tax rate to change from 30% to 20% beginning 2019. (the rate remains 30% for 2018 taxes. Taxable income in 2018 is 39 million.

Prepare the journal entry to record Read's income tax expense in 2018.

income tax expense ?

deferred tax liability?

       Income tax payable ?

Explanation / Answer

Note:

Journal Entry in 2018

Accounts Titles & Explanation Debit ($) Credit ($) Income tax expense 8,800,000 Defferred tax liability 2,900,000 Income tax payable 11,700,000

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.