Answer:
Income Tax Expense a/c Dr $ 20,57,000
Deferred Tax Liability a/c Dr $ 43,000
To Income Tax Payable a/c Cr $ 21,00,000
($6 Million x 35%)
Explanation:
The Above will result in timing Difference.
Timing Differences are those which can be reversed in subsequent periods.
Income Tax Expense a/c Dr $ 20,57,000
Deferred Tax Liability a/c Dr $ 43,000
To Income Tax Payable a/c Cr $ 21,00,000
($6 Million x 35%)
( Being Entry Passed for Tax Expense and Timing Difference Adjusted through Deferred Tax Liabilty)
