Answer:
The answer is given below;
Explanation:
Temporary Difference $208,000-$154,000=$54,000
Taxable Temporary Difference=$54,000*25%=$13,500
Current Tax Expense =154,000*25%=$38,500
Please note that taxable temporary difference result in deferred tax expense and corresponding effect in deferred tax liability.
Deferred Tax Expense Dr.$13,500
Current Tax Expense Dr.$38,500
Deferred Tax liability Cr.$13,500
Current Tax Liability Cr.$38,500
