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alexira [117]
3 years ago
13

In 2016, its first year of operations, Wilber Company reported pretax accounting income of $60,000. Included in the $60,000 was

an expense for accrued, unpaid warranty costs of $8,000, which are not deductible until paid for income tax purposes. Wilber's income tax rate was 20%. The entry to record the income tax expense would include a:
A. credit to Income Taxes Payable for $12,000.
B. credit to Income Tax Expense for $12,000.
C. debit to Deferred Tax Asset for $1,600.
D. credit to Deferred Tax Liability for $1,600.
Business
1 answer:
Alex Ar [27]3 years ago
3 0

Answer:

credit to Deferred Tax Liability for $1,600.

Explanation:

Deferred tax liability is a tax expense that accrued within one accounting period but is payable at a future period.

The journal entries on creation of the deferred tax liability includes a debit to Income tax expense and a credit to deferred tax liability.

On settling of the deferred tax we debit deferred tax liability and credit Income tax expense.

In this instance the income tax rate is 20%. Warranty cost of $8,000 is deferred.

Deferred tax= 0.2 * 8,000= $1,600

So the journal entry will be a debit to Income tax expense of $1,600 and a credit to Deferred tax liability of $1,600

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Which of the following statements best represents the reason for the accounting equation?
NikAS [45]

Answer:

c. The total of everything owned by a business must always equal the total of what the business owes to creditors and owners.

Explanation:

In every balance sheet, the accounting equation has used that means

Total assets = Total liabilities + Shareholder equity

The statement of stockholder's equity comprises common stock and retained earnings. And, the balance sheet comprises of the assets and liabilities.

The total assets comprises of current assets, fixed assets and the intangible assets

The current assets includes cash, stock, account receivable, etc

Fixed assets include plant & machinery, land, equipment, furniture & fittings, etc.

And, the intangible assets include patents, copyrights, goodwill, etc.

And, the total liabilities include current liabilities and the long term liabilities

With the help of the accounting equation, the total assets are equal to the total liabilities including stockholder's equity.

Hence, the most appropriate option is c.

3 0
3 years ago
The increasing involvement of salespeople in _____________________ is one major reason why the average cost of a sales call has
Otrada [13]
It would be because of Non selling activities
8 0
3 years ago
During March, the production department of a process operations system completed and transferred to finished goods 23,000 units
Alchen [17]

Answer:

c. $1.58.

Explanation:

The computation of the direct materials cost per equivalent unit is given below:

Equivalent units for material is

= 100% of 193,000 + 100% of 28,000

= 193,000 + 28,000

= 221,000

Equivalent cost for material is

= $94,100 + $254,800

= $348,900

So, the direct materials cost per equivalent unit is

= $348,900 ÷ 221,000

= $1.58

4 0
3 years ago
The management at Mova Autos Inc. has realized that the company's sales have started to decline due to increasing competition. T
V125BC [204]

Answer:

Implementation of Idea (DO)

Explanation:

According to PDCA the first phase is the planning and the next one is doing that what we have planned. The third one is Check which means continuously monitoring the execution of the plan. And the last one is Act which means that the control must be emphasized on the execution to correct the discrepancies found.

The Company has completed the first phase and is recommended to complete the second one which is that the company must do whatever it has planned for the better future of company.

3 0
3 years ago
Where would revenue be maximized for a company facing a linear demand curve
Bond [772]

Answer:

at equilibrium point

Explanation:

equilibrium when price is reasonable to both sellers and buyers. They are willing to buy and sell at optimal quantity, so that firm can maximize revenue

3 0
3 years ago
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