aramel Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2021:  Book income before income taxes      2,700,000.00  Add temporary

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.