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Journal entryIntermediatePublished

Question · Scope and tax effects of retrospective adjustments

Zétine applies a new inventory cost policy retrospectively: opening inventories of the earliest period presented increase by 160,000. The tax base does not change and the tax rate is 25 % (case data). Record the entries adjusting the opening balances.

Adjustment to opening inventories
160,000
Tax rate
25 %
Your answer
  1. Line 1

    Account Inventories

  2. Line 2

    Account Retained earnings

  1. Line 1

    Account Retained earnings

  2. Line 2

    Account Deferred tax liability

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