On 1 April 2013, the company rate of income tax was changed from 35% to 30%. At the previous reporting date (30 June 2012) Montgomery Limited had the following tax balances:
Deferred tax assets $26 250
Deferred tax liabilities $21 000
What is the impact of the tax rate change on income tax expense?

Question

Quizplus · Accepted Answer

The deferred tax asset will increase by $750 (26,250 x (35% - 30%)).

On 1 April 2013, the Company Rate of Income Tax