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1: The income tax expense is: a, $90,000 b, $135,000 c, $150,000 d, $300,000 2: The deferred tax asset to be recognized is: a, $0
1: The income tax expense is:
a, $90,000 b, $135,000 c, $150,000 d, $300,000
2: The deferred tax asset to be recognized is:
a, $0 b, $45,000 current c, $225,000 current d, 225,000 noncurrent
3: The deferred tax liability--current to be recognized is:
a, $45,000 b,$67,500 c,$90,000 d, $180,000
A company, at the end of 20X1, its first year of operations, prepareda reconciliation between pretax financial income and taxable income as follows. RECONCILIATION BETWEEN PRETAX FINANCIAL ACCOUNTING INCOME AND TAXABLE INCOME FOR FIRST YEAR OF OPERATIONS Pretax financial income Estimated litigation expense Installment sales Taxable income 300,000 750,000 600,000) 450,000 The estimated litigation expense of $750,000 wil be deductible in 20X3 when it is expected to be paid. The gross profit from the installment sales will be realized in the amount of $300,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installment accounts receivable are classified as $300,000 current and $300,000 noncurrent. The income tax rate is 30% for all years
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