Future CPA
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Joined: 04 Dec 2008
Location: United States
Online Status: Offline
Posts: 504
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| Posted: 20 Nov 2009 at 14:06 | IP Logged
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Need some clarification-
Deferred Tax Liability:
Assume I have $60,000 in current taxes and $10,000 in DTL. Does that mean that on the books, my total expense for the taxes will be $70,000? I will expense the total amount, but only pay the current amount and the deferred $10,000 in a liability account?
Dr. Tax Expense $70,000
Cr. Liability $10,000
Cr. Tax Payable $60,000
Deferred Tax Asset:
Same scenario, but $10,000 is a DTA this time. So will I pay $70,000 in taxes, but only expense $60,000 and the other $10,000 record as asset?
Dr. Tax Expense $60,000
Dr. Asset $10,000
Cr. Tax Payable $70,000
Can someone please confirm if I'm on the right track?
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My inspiration: "O mankind! We have created you male & female, & have made you nations & tribes that ye may know one another. The noblest of you is the best in conduct."-Quran
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Topic: Deferred Taxes
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