Under the accrual method,what is the effect of the tax rate change in F2014? $$\begin{array} { | l | r | r | r | }
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Deferred tax liability } & 30,000 & & \
\hline \text { Revenue } & & 130,000 & 150,000 \
\hline \text { Taxable income } & & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 35 \% & 35 \% \
\hline
\end{array}$$

Question

Under the accrual method,what is the effect of the tax rate change in F2014? $$\begin{array} { | l | r | r | r | } 
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Deferred tax liability } & 30,000 & & \
\hline \text { Revenue } & & 130,000 & 150,000 \
\hline \text { Taxable income } & & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 35 \% & 35 \% \
\hline
\end{array}$$

Quizplus · Accepted Answer

The increase in the tax rate from 30% to 35% affects the deferred tax liability. The deferred tax liability is recalculated using the new tax rate, resulting in an increase of 5,000 (30,000 * (35% - 30%)).

Under the Accrual Method,what Is the Effect of the Tax