Question

Sloan Company started the period with a deferred tax asset of $508. As of the end of the period, Sloan identifies future deductible amounts of $1,117. Duchess has a tax rate of 31%, and calculates that taxes payable will be $1,963. Duchess’s tax expense journal entry would include a. debit D or credit C of $_____ to the deferred tax asset account. To answer place, the amount and a D or C right next to it. For example, if your answer is debit of $100, answer 100D. Do not leave a space.

Answer 1

Opening Balance-DTA	$     508.00
Closing balance-DTA	$     346.27
(1117*31%)
New Creation	$     161.73
Entry:
Accounts	Debit	credit
Tax expense	$ 2,124.73
Taxes payable		$ 1,963.00
Deferred tax asset		$     161.73
credit to the Deferred tax asset account of 161.73 or 162