What is the balance of the deferred tax liability due to the rate change? $\begin{array}{|l|r|}
\hline\text { Opening taxable temporary differences } & 400,000 \
\hline \text { Tax rate (prior year) } & 25 \% \
\hline \text { Tax rate (current year) } & 30 \%\\hline
\end{array}$

Question

Quizplus · Accepted Answer

The deferred tax liability is calculated as the taxable temporary differences multiplied by the current tax rate. The change in rate from 25% to 30% means the liability increases from 100,000 (400,000 * 25%) to 120,000 (400,000 * 30%), resulting in a 120,000 credit balance.

What Is the Balance of the Deferred Tax Liability Due