Estimated warranty expense accrual for book purposes

Reference no: EM131766165

Question: Company reported a net deferred tax asset balance of $157,500 resulting in an estimated warranty expense accrual for book purposes. The total book attacks difference related to the basis of an estimated warranty liability is $350,000. The enacted rate related to this balance change for 45% to 40% effective immediately what are the journal entries needed to make an adjustment in this change of tax rates?

Options are deferred tax asset deferred tax liability income tax expense income tax payable retained earnings warranty expense and warranty liability.

Reference no: EM131766165

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