Tommy Corp. reported a net deferred tax asset balance of $ 200,000 resulting from an estimated warranty expense accrual for book purposes. The total book-tax difference related to the bases of the estimated warranty liability is $ 500 comma 000. The enacted statutory tax rate related to this balance changed from 40% to 35%, effective immediately. By what amount will the deferred asset balance change?

Answer rating: 100% (QA)

To calculate the change in the deferred tax asset balance we need to consider the change in the enac... View the full answer