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Use the following information for questions 18 through 28. Mathis Co. at the end of 2014, its first year of operations, prepared a recoeciliation between
Use the following information for questions 18 through 28. Mathis Co. at the end of 2014, its first year of operations, prepared a recoeciliation between pretax financial income and taxable incoene at folliowi: The estimated litigation expense of 52,000,000 will be deductible in 2016 when it it expocted to be paid. The gross profin from the installment sales will be realized in the amount of $800,000 in each of the next two years. The estimated liability for litigation is classified as noncurrent and the installmeet accounts roceivable are classified as $800,000 current and $800,000 noncurrent. The income tax rate is 40% for all years. 18. The income tax expense is a. $240,000, b. $320,000. c. $360,000. d. 5400,000 . 19. The deferred tax asset to be recognized is a. $240,000 currest b. $240,000 noncurrent. c. $800,000 current. d. $800,000 noncurrent. 7 20. The deferred tax liability - current to be recognized is a. $240,000. b. $480,000. c. $320,000. d. $640,000
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