On June 1, 2018, you discover that the depreciation software your employer uses eliminated a $175,000...
On June 1, 2018, you discover that the depreciation software your employer uses eliminated a $175,000 asset from the register before it was fully depreciated. The financial statements for 2017 have been issued without including $35,000 of depreciation expense related to this asset. In the 2017 corporate tax return (based on different software), the corporation correctly deducted the $35,000 of depreciation expense. The extra $35,000 of difference between book and tax depreciation resulted in an additional deferred tax liability which was booked at the corporate rate of 20%.
Record the entry required at 6/1/2018.
Homework Answers
| Date | General Journal | Debit | Credit |
| 06-01-2018 | Profit & Loss (35000*20%) | $ 7,000 | |
| Deferred Tax Liability | $ 7,000 |
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On June 1, 2018, you discover that the depreciation software
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