Answer:
A deferred tax liability will be reported on the balance sheet
b) trademark
as longterm assets refers to those assets that will not become cash within a one-year period
Explanation:
As the accounting makes the depreciaiton of the asset among 8 years
while the MACRS (depreciaiton for tax purposes) does it in 5 years
the company will pay lower income taxes now but, higher in the future
creating a tax liability as the tax relief occurs now.
Calculations:
Account Depreciation Expense
(cost - salvage value )/ useful life =
(130,000 - 10,000)/ 8 years = 8,000
Tax-purpose depreciation expense
130,000 x 20% = 26,000
There is a tax difference of (26,000 - 8,000) x corporate income tax
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Answer:
In unitary terms, the average cost varies because the fixed costs are divided by higher or fewer units.
Explanation:
The average cost per unit varies according to production levels. First, <u>we need to clarify that fixed costs remain constant in the relevant range. </u>Between levels of production, the total fixed cost don't change.
In unitary terms, the average cost varies because the fixed costs are divided by higher or fewer units. Therefore, a fixed cost of $100 in 100 units is $1 per unit; but, in 50 units is $2 per unit. In unitary terms, variable cost remains the same.
<u>Finally, in total terms, fixed costs (in the relevant range) remains constant and total variable cost varies with production. </u>In unitary terms, variable cost remains constant and fixed cost varies.
