Under U.S. GAAP, what deferred tax amount should Charmed record for this temporary difference?
A) $20,000
B) $20,600
C) $21,000
D) $21,600
Answer: C
Explanation: C) $60,000 × 35%; substantively enacted. For operations within the U.S. taxing jurisdictions, guidance in Topic 740 is to be followed requiring entities to recognize the effect of the change in tax rates in the period of enactment. Under IFRS, tax rates that have been “substantively enacted” are also used.