Computation of Deferred Taxes
Construct the entry as follows:
Deferred tax asset 12,200
Tax expense 184,800 (plug figure)
Deferred tax liability 77,000
Tax payable 120,000
What about the consideration of a valuation allowance in this case?
What would the entry have been if there had been a balance in the deferred tax asset account of $15,000 (debit) and a balance of $60,000 (credit) in the deferred tax liability account at the beginning of the period before adjustment?