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Sunland Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2024 related to $1440000 of excess depreciation. In December of 2024, a new income tax act is signed into law that lowers the corporate rate from 30% to 25%, effective January 1, 2026. If taxable amounts related to the temporary difference are scheduled to be reversed by $720000 for both 2025 and 2026, Sunland should increase or decrease deferred tax liability by what amount? O decrease by $72000 O increase by $36000 O decrease by $36000 O increase by $72000

Sunland Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2024 related to $1440000 of excess depreciation. In December of 2024, a new income tax act is signed into law that lowers the corporate rate from 30% to 25%, effective January 1, 2026. If taxable amounts related to the temporary difference are scheduled to be reversed by $720000 for both 2025 and 2026, Sunland should increase or decrease deferred tax liability by what amount? O decrease by $72000 O increase by $36000 O decrease by $36000 O increase by $72000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sunland Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2024 related to $1440000 of excess depreciation. In December of 2024, a new income tax act is signed into law that lowers the corporate rate from 30% to 25% , effective January 1, 2026. If taxable amounts related to the temporary difference are scheduled to be reversed by $720000 for both 2025 and 2026, Sunland should increase or decrease deferred tax liability by what amount? decrease by $72000 O increase by $36000 O decrease by $36000 O increase by $72000
Transcribed Image Text:Sunland Co. had a deferred tax liability balance due to a temporary difference at the beginning of 2024 related to $1440000 of excess depreciation. In December of 2024, a new income tax act is signed into law that lowers the corporate rate from 30% to 25% , effective January 1, 2026. If taxable amounts related to the temporary difference are scheduled to be reversed by $720000 for both 2025 and 2026, Sunland should increase or decrease deferred tax liability by what amount? decrease by $72000 O increase by $36000 O decrease by $36000 O increase by $72000
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