E. Evaluate the imapct of the tax rate changes on a company's financial statements and ratios.

Question 1

Income Tax Expense clc…(ex: 239)

Answer 1

= taxes payable +changeDTL - changeDTA

If +T, then +DTL to taxes payable, -DTA from taxes payable

T rate decrease? - in DTL would result in lower income tax expense and the decrease in DTA would result in higher inc. tax expense. In the case of FTL, we are adding a -change, and in the case of DTA we are subtracting a negative change.