. Assume the following: A firm acquires an asset for $120,000 with a 5 year useful life and no salvage The asset will generate $50,000 of cash flow for all five years The tax rate is 20% The firm will depreciate the asset over four years on a straight-line (SL) basis for tax purposes and over five years on a SL basis for financial reporting purposes. Income tax expense in year 1 is: O $20,000 $4,000 $5,200 Which of the following statements is most accurate? Under the liability method of accounting for deferred taxes, an increase in the tax rate at the beginning of the accounting period will: decrease taxable income in the current period o increase a deferred tax liability decrease a deferred tax asset A firm issues a $10 million bond with a 7% coupon rate, 4 year maturity, and annual interest payments when market interest rates are 6%. The total interest expense reported by the issuer over the life of the bond will be: O $2,453,489 $2,800,000 $2.400,000 During the period between 1997 and 2002, the accounting area resulting in the most SEC sanctions was? o Revenue recognition CEO compensation Business combinations and mergers