Bronson Industries reported a deferred tax liability of $8 million for the year ended December 31, 2015, related to a temporary difference of $20 million. The tax rate was 40%. The temporary difference is expected to reverse in 2017 at which time the deferred tax liability will become payable. There are no other temporary differences in 2015-2017. Assume a new tax law is enacted in 2016 that causes the tax rate to change from 40% to 30% beginning in 2017. (The rate remains 40% for 2016 taxes.) Taxable income in 2016 is $30 million. Required:

1. Determine the effect of the change and prepare the appropriate journal entry to record Bronson’s income tax expense in 2016.

2. What adjustment, if any, is needed to revise retained earnings as a result of the change?

1.The effect of the change is that the deferred tax liability will have to be revised in order for it to show the current tax rate.

DR Income tax expense $10

DR Deferred tax liability$2

CR Income tax payable $12

2. NO adjustment will be needed to revise the retained earnings .

Explanation:

1. Calculation to for the effect of the change as well as the preparation of the journal entry to record the income tax expense in 2016.

Based on the information given the effect of the change is that the deferred tax liability will have to be revised in order for it to show the current tax rate.

First step is to calculate the Deferred tax liability using this formula

Deferred tax liability =(Deferred tax liability temporary difference amount× Change in tax rate)

Let plug in the formula

Deferred tax liability ($20 million x [40% - 30%]) Deferred tax liability=($20 million ×10%)

Deferred tax liability=$2

Second step is to calculate for the income tax payable using this formula

Income tax payable =(Taxable income× Tax rate)

Let plug in the formula

Income tax payable=($30 million x 40%)

Income tax payable= $12

Last step is to know the income tax expense using this formula

Income tax expense = Amount of Income tax payable-Deferred tax liability amount

Let plug in the formula

Income tax expense =$12-$2

Income tax expense =$10

JOURNAL ENTRY on record income tax expenses

DR Income tax expense $10

DR Deferred tax liability$2

CR Income tax payable $12

2. Based on the information given NO adjustment will be made in order to revise the retained earnings because in a situation where a previous estimate is been revised the financial statements will not be revised which inturn means that no further adjustments will be made to the current accounts.

b $274.07

step-by-step explanation:

you just devide 222 by 0.81

according to the song of roland, the characteristics of an ideal knight are: loyalty to the king, skilled warriors and horseman, valiant, bold, courageous, strong and proud in battle. they should be determined to fulfil their duties and willing to die to make their people safe.