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Mice21 [21]
3 years ago
11

Klapper Company claimed a tax deduction which was uncertain when it was deducted in 2018 but is relatively certain of receiving

the deduction over a five-year period. Which of the following is not correct in accounting for the uncertain tax item?
a. A contingency reserve will be set up at the same amount as the deferred tax asset if the firm is certain it may claim 100% of the deduction over time.
b. Income tax expense in the first year is the current portion of income tax expense minus the increase in the deferred tax asset.
c. The contingency reserve is reduced each year with the offset to the deferred tax account.
d. As the company will ultimately get 100% of the deduction, no contingency reserve is required.
Business
1 answer:
sammy [17]3 years ago
5 0

Answer: d. As the company will ultimately get 100% of the deduction, no contingency reserve is required.

Explanation:

Just because the company will eventually get 100% of the deduction does not mean that no contingency reserve is required.

A contingency reserve needs to be created that is the same amount as the deferred tax asset which arises from the claimed deduction and deducted from every year to offset the deduction for that particular year until the 5 years have elapsed.

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Which of the following would be classified as a short-run decision? A restaurant's decision to increase the number of patrons it
podryga [215]

Answer:

A university's decision to add a new residence hall. A trucking firm's decision to move to a smaller facility.

Explanation:

Short run decision affects variable factor only. Adding a new facility is a long run decision. Hence a firm's decision to decrease the amount of electricity used in day-to-day operations by encouraging employees to adopt conservation strategies is a short run decision.

Hence, the correct answer would be:

A university's decision to add a new residence hall. A trucking firm's decision to move to a smaller facility.

4 0
3 years ago
When an offeree changes the terms of an offer, it is called a counteroffer. What happens
Amanda [17]
<h2>Original offer becomes void (nothing).</h2>

Explanation:

Counteroffer: The original offer would have been either rejected or modified with new one.

This gives the original offeror three options:

  • accept the counteroffer,
  • reject it, or
  • make another offer.

Example:

When a buyer makes an offer on say "home", there is a possibility of seller can making a counteroffer. In other terms, a counteroffer is one of the negotiating tactic in response to the initial offer. You can call it as business tricks. When a counteroffer is announced, "the original offer goes nothing(void)".

7 0
3 years ago
Suppose it is 1810. what advice would you give tecumseh to help him be more successful in his goals than he actually was?
Mashutka [201]
I would probably urge him to engage in guerrilla warfare to be more successful in his military campaigns against the American troops and to fortify his new town Prophetstown to be better prepared against attack by American forces .
7 0
3 years ago
How are resources allocated in a traditional economy?
mote1985 [20]
Traditional morals the system of production of material wealth
4 0
3 years ago
Read 2 more answers
Antonio and Barbara are partners who share income in the ratio of 1:2 and have capital balances of $40,000 and $70,000 at the ti
NikAS [45]

Answer: c. $20,000

Explanation:

The Loss on Realization is monies accrued after assets have been sold off at less than their original value and in Calculating it, the following formula is used,

Loss on realization = Total Capital Balances after payment of liabilities minus - balance

Slotting in the figures therefore we have,

Loss on realization = $40,000 + $70,000 - $80,000

= $30,000 was the total loss on Realization

Seeing as Antonio and Barbara are partners who share income in the ratio of 1:2 we allocate to Barbara as follows,

Barbara = $30,000 * 2/(1+2)

= $20,000

Therefore option C is correct.

6 0
3 years ago
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