Hi guyz
need ur help regarding deferred tax
bellow is example for deferred tax asset
Black Co., organized on January 2, Year 1, had pretax accounting income of $500,000 and taxable income of $800,000 for the year ended December 31, Year 1. The enacted tax rate for all years is 30%. The only temporary difference is accrued product warranty costs which are expenses to be paid as follows: Year 2, $100,000; Year 3, $100,000; Year 4, $100,000
now as per the book to record the tax exp and asset bellow are the journal entry
Journal entry to record the Year 1 taxes:
DR Deferred tax asset $ 90,000
DR Income tax expense—current 240,000 ??
CR Income tax payable $240,000
CR Income tax benefit—deferred 90,000
my question is current income tax exp should be 150,000 only (because this is the expense for the current year under GAAP) ?
plz help me to understand
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