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Question - Assume that at the end of 2017, Jenks Inc's, only temporary difference is a $2,000,000 taxable temporary difference that arose in the prior year and is expected to reverse in 2018 and 2019.
The deferred tax liability at the beginning of 2017 is $700,000, reflecting the 35% corporate tax rate in effect at that date.
On December 22, 2017, legislation was enacted by Congress and signed by the President that reduced the tax rate to 21%, effective January 1, 2018.
What is Jenks Inc's deferred tax liability on December 2017?
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