1 An entity may have to present a reconciliation of (1) the amount of income tax expense allocated to continuing operations to (2) the amount of income tax expense that would result from applying domestic federal statutory rates to pretax financial income from continuing operations. Which of the following is correct? 1 2 3 4 Nonpublic entities must provide a numerical reconciliation (in percentages or in dollar amounts); public entities must disclose significant reconciling items but may omit any numerical reconciliation. Public entities must provide a reconciliation that may be in percentages or dollar amounts; nonpublic entities must disclose significant reconciling items but may omit any numerical reconciliation. Public entities must provide a reconciliation that must be in terms of dollar amounts; nonpublic entities must disclose significant reconciling items but may omit any numerical reconciliation. Public entities must provide a reconciliation that must be in terms of percentages; nonpublic entities must disclose significant reconciling items but may omit any numerical reconciliation. 2 In a purchase business combination, Subtopic 805-740 requires generally that a deferred tax asset or Liability be recognized at the time of the combination for the tax effect of any differences between the fair values and tax bases of assets acquired and liabilities assumed. There are certain exceptions, however, for which no deferred tax asset or liability is recognized for the difference between an asset or liability's fair value and its tax basis. Which of the following items represents one of these exception cases? 1 Accounts receivable 2 Depreciable plant assets 3 Inventory 4 Leveraged leases