What is the journal entry necessary to adjust deferred taxes

Reference no: EM131882890

Question: 1. Lee Company's current income taxes payable related to its taxable income for 2017 is $320,000. In addition, Lee's deferred tax liability increased $40,000 and its deferred tax asset increased $10,000 during 2017. What is Lee's income tax expense for 2017?

2. Addison Co. has one temporary difference at the beginning of 2017 of $500,000. The deferred tax liability established for this amount is $150,000, based on a tax rate of 30%. The temporary difference will provide the following taxable amounts: $100,000 in 2018, $200,000 in 2019, and $200,000 in 2020. If a new tax rate for 2020 of 20% is enacted into law at the end of 2017, what is the journal entry necessary in 2017 (if any) to adjust deferred taxes?

Reference no: EM131882890

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