Goff Inc'S Taxable Income Is Computed as Follows: Goff's Tax

question 78

Multiple Choice

Goff Inc.'s taxable income is computed as follows: Goff's tax rate is 21%.Which of the following statements is true?

• A)The permanent differences caused a $16,365 net increase in Goff's deferred tax liabilities.
• B)The permanent differences caused a $16,365 net increase in Goff's deferred tax assets.
• C)The temporary differences caused a $99,792 net increase in Goff's deferred tax assets.
• D)The temporary differences caused a $99,792 net increase in Goff's deferred tax liabilities.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Total Gross Margin

The difference between the sales revenue and the cost of goods sold, indicating the total profitability from goods sold.

Absorption Costing

A pricing approach that encompasses all costs related to production - including direct materials, direct labor, as well as both variable and fixed overhead expenses - within the product’s cost.

Absorption Costing

A method of accounting that includes all manufacturing costs, both variable and fixed, in the valuation of inventory and cost of goods sold.