4. Circle the correct answer. The income tax amount the company owes the IRS and the applicable state taxing agency is: (1 point) A. The deferred income tax provision on the regular income statement and the current income tax liability on the balance sheet. B. The current income tax provision on the regular income statement and the deferred income tax liability on the balance sheet. C. The deferred asset on the balance sheet and the deferred income tax provision on the regular income statement. D. The current income tax liability on the balance sheet and the current income tax provision on the regular income statement. 5. Cirde the best answer. Conceming deferred income taxes: (1 point) A. A company prefers an increase in a deferred tax asset because it is a use of cash. B. A company prefers an increase in a deferred tax liability because it is a source of cash. C. A company has no preference between a deferrell tax liability and a deferred tax asset. D. Only results when accounting basis income is greater than taxable income. 6. Sanchez Co. reported accounting basis income of $100,000 on its regular income statement which included a $30,000 warranty expense, However, due to IRS regulations, Sanchez could only deduct $20,000 of the warranty expense on its income tax retum (taxable income). The rest of the $10,000 will be deductible on Sanchez's income tax return next year. Assuming a 20% tax rate, which of the following items would show up Sanchez's current year financial statements? (3 points) A. A $20,000 total income tax provision on the regular income statement, a $16,000 current tax liability on the balance sheet and a $4,000 deferred tax liability on the balance sheet. B. A $20,000 total income tax provision on the regular income statement, a $22,000 current tax liability on the balance sheet and a $2,000 deferred tax asset on the balance sheet. C. A $22,000 total income tax provision on the regular income statement, a $20,000 current tax liability and $2,000 deferred liability on the balance sheet D. None of the above, Pane