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XYZ Corporation has one asset worth $450,000. Accumulated Depreciation to date is $190,000 and accumulated CCA is $220,000. The Corporation also recorded warranty expenses
XYZ Corporation has one asset worth $450,000. Accumulated Depreciation to date is $190,000 and accumulated CCA is $220,000. The Corporation also recorded warranty expenses of $30,000. To date, no customers have required warranty service, so no warranty expenditures have been made. Assuming the tax rate is constant at 40%, this will result in: a. A net deferred income tax asset of $12,000 b. No temporary difference c. A net deferred income tax asset of $30,000 d. A net deferred income tax liability of $12,000
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