Entity A is a listed company in Hong Kong and the end of the reporting period...

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Entity A is a listed company in Hong Kong and the end of the reporting period is on 31 December. On 31 December 2022, the balances of Deferred tax liability and Deferred tax asset were $365,200 and $256,200 respectively. In order to improve the financial stability of the local government, on 28 February 2023, the local government announced that the profits tax rate was increased from 20% to 35% which is effective from 1 January 2023. REQUIRED: Prepare journal entries to recognise the change in the profits tax rate for the year 2023 on an appropriate date. DATES FOR INPUT: | 31-Dec-22 | 1-Jan-23 | 28-Feb-23 | 31-Dec-23 | Any date | ACCOUNTS FOR INPUT: | Current tax liability | Income tax expense | Deferred tax asset | Deferred tax liability | | Over-provision of tax | Under-provision of tax | Bank | Retained earnings | | Revaluation reserve | No entry | ANSWER: Journal Entries: Date Account Name Debit ($) Credit ($) Hints for Sequence Asset. Entity A is a listed company in Hong Kong and the end of the reporting period is on 31 December. On 31 December 2022, the balances of Deferred tax liability and Deferred tax asset were $365,200 and $256,200 respectively. In order to improve the financial stability of the local government, on 28 February 2023, the local government announced that the profits tax rate was increased from 20% to 35% which is effective from 1 January 2023. REQUIRED: Prepare journal entries to recognise the change in the profits tax rate for the year 2023 on an appropriate date. DATES FOR INPUT: | 31-Dec-22 | 1-Jan-23 | 28-Feb-23 | 31-Dec-23 | Any date | ACCOUNTS FOR INPUT: | Current tax liability | Income tax expense | Deferred tax asset | Deferred tax liability | | Over-provision of tax | Under-provision of tax | Bank | Retained earnings | | Revaluation reserve | No entry | ANSWER: Journal Entries: Date Account Name Debit ($) Credit ($) Hints for Sequence Asset.

Answer rating: 100% (QA)

The information provided shows that a company in Hong Kong has existing deferred tax assets and liabilities and there is a change in the tax rate effe... View the full answer