Answer:
The answer is given below;
Explanation:
Deferred Liability opening $1,260,000
Deferred Liability as result of new tax rates $3,150,000*20%=($630,000)
Net difference deferred tax liability overstated $630,000
Net Taxable income for the year $5,250,000
Current Tax Expense (5,250,000*20%) $1,050,000
Net deferred tax liability to be reported as at 2019 will be $630,000
The additional amount booked will be reversed by;
Deferred Tax liability Dr.$630,000
Deferred Tax Expense Cr.$630,000
Therefore current tax expense will be $1,050,000-$630,000=$420,000
