Change in Tax Rates.docx - ACCT 4501 Class Session#9 Change in Enacted Tax Rates Typical Corp reported a deferred tax liability of $7,200,000 for the

Change in Tax Rates.docx - ACCT 4501 Class Session#9 Change...

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ACCT 4501 Class Session #9 Change in Enacted Tax Rates Typical Corp. reported a deferred tax liability of $7,200,000 for the year ended December 31, 2016, when the tax rate was 40%. The deferred tax liability was related to a temporary difference of $18,000,000 caused by an installment sale in 2016. The temporary difference is expected to reverse in 2018 when the income deferred from taxation will become taxable. There are no other temporary differences. The TCJA passed Congress in 2017 and the current 40% tax rate will decrease to 20% effective January 1, 2018. Taxable income for the year 2017 is $30,000,000. Required: (a.) Show the journal entry to record the tax provision in 2017.
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  • Spring '16
  • Taxation in the United States

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