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Vd(6 unread) . mkennenzi n (1)Facebook × xyD 16 Homework × Act2206 Registrationt coezto.mheducation.comhmtpx Question 10.00 points Bronson Industries reported a deferred tax liability of $8. 1 million for the year ended December 31, 2015, related to a temporary expected to reverse in 2017 at which time the deferred tax liability will become payable. There are no other temporary differences in 2015-2017. change from 30% to 20% beginning n 2017 (The rate remains 30% for 2016 tares ) Tarable income n 2016 is $37 milion. difference of $27 million The tax rate was 30% The temporary difference is Assume a new tax law is enacted in 2016 that causes the tax rate to Prepare the appropniate joumal entry to record Bronson's income tax expense in 2016. What adjustment, if to revise retained eamings as a result of the change? (f no entry is required for a any, is transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions and round your answers to 1 decimal place.) View transaction list Journal entry worksheet Record 2016 income taxes Note: Enter debits before credits DebitCredit efemed tax Record entry Clear eimry View general journal TOSHIBA esc 2 3 4 5

Explanation / Answer

Income Tax Expenses

(30 % of ($ 35 Million + $ 27 Million)

Defferd Tax Liablity A/c

($ 8.1 Million - 20 % of $ 27 Million)

($ 8.1 Milliom $ 5.4 Million)

Event Genereal Journal Debit Credit 1

Income Tax Expenses

(30 % of ($ 35 Million + $ 27 Million)

$ 18.6 Million To Defferred Tax Liablity $ 8.1 Million To Tax Payable $ 10.5 Million (Being Income Tax Payable And Deferred tax Liablity for the year 2016 for income of $ 35Million and diffrance of $ 27 million is booked at 30% tax rate) 2

Defferd Tax Liablity A/c

($ 8.1 Million - 20 % of $ 27 Million)

($ 8.1 Milliom $ 5.4 Million)

$ 2.7 Million To Retained Earnings A/c $ 2.7 Million (Being the Deffered liablity of 2016 payable in 2017 but the tax rate has come doen from 30% to 20% so the excess provision of Deferred tax liablity of 10 % will be reversed and retained earnings will increase by 10 % in Year 2017 for the excess bokking of the tax exepenses for Year 2016.)

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