If income tax expense reported on the income statement is $46,500 for 2014, and the tax return for 2014 (the first year) shows an income tax liability of $44,250, the deferred income tax on the balance sheet at the end of 2014 will be which of the following? Assume a 40% tax rate.

a.A $6,750 liability.

b,A $2,250 liability.

c,A $2,250 asset.

d. A $6,750 asset.

Your goal is to be able to withdraw $5,100 for each of the next six years beginning one year from today. The return on the investment is expected to be 11%. The amount that needs to be invested today is closest to: (Table A.1, Table A.2, Table A.3, and Table A.4) (Use appropriate factor(s) from the tables provided.)

a.$37,970.

b.$21,576.

c,$30,600.

d, $29,616.

Purdum Farms borrowed $12 million by signing a five-year note on December 31, 2013. Repayments of the principal are payable annually in installments of $2.4 million each. Purdum Farms makes the first payment on December 31, 2014 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2014, after the first payment is made?

a. Zero in current liabilities and $12 million in long term liabilities.

b.$2.4 million in current liabilities and $9.6 million in long term liabilities.

c,$2.4 million in current liabilities and $7.2 million in long term liabilities.

d. Zero in current liabilities and $9.6 million in long term liabilities.

On October 1, 2014, Donna Equipment signed a one-year, 9% interest-bearing note payable for $50,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense should be reported in the 2015 income statement?

a.$2,250.

b,$1,125.

c,$4,500.

d.$3,375.