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NISA [10]
3 years ago
8

Scott Corp. received cash of $20,000 that was included in revenues in its Year 1 financial statements, of which $12,000 will not

be taxable until Year 2. Scott’s enacted tax rate is 30% for Year 1, and 25% for Year 2. What amount should Scott report in its Year 1 balance sheet for deferred income tax liability?
Business
1 answer:
Oliga [24]3 years ago
6 0

Answer:

3,000

Explanation:

As the income will be taxed at 25% the income tax liability will be for that amount

12,000 x 25% = 3,000

The tax deferred liability is generated from a temporary difference. The company is paying less income tax today but will pay more in the future. Hence there is a liability.

The accounting reason for this treatment is to match expenses with the time they occur or the revenues which generated.

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'As fewer people buy gym memberships, the demand for running shoes will decrease and the price of a pair of running shoes will i
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3 years ago
Vinny asks if he should force Spud to finish the job. Could Oscar get a court order requiring Spud to actually build the display
adell [148]
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8 0
3 years ago
A licensee who assists one or more parties through a transaction without being an agent for any party to the transaction is a(n)
tino4ka555 [31]

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Find out more on brokers at brainly.com/question/17085854

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7 0
2 years ago
. A tomato farmer has used direct distribution to sell to local consumers through an area farmers' market. Last year, she sold 4
ch4aika [34]

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if she uses the indirect channel, her total revenue = 650 x $1.63 = $1,059.50

her total revenue will increase when selling to he supermarkets, but also her variable production costs will increase. This means that it is probable that her total contribution margin decreases even if total revenue decreases.

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3 years ago
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