Betta Group Just Completed Its Second Year of Operations and Has

question 16

Multiple Choice

Betta Group just completed its second year of operations and has a deferred tax asset of $82,000 related to a net operating loss of $205,000 from the previous year. In the current year Betta generates $635,000 in revenues and incurs $341,000 in expenses. There are no permanent or temporary book-tax differences. Assuming the same tax rate as last year, what is the tax related journal entry for the current year?

• A) \[\begin{array} { | c | r | r | }
• \hline \text { Income Tax Refund Receivable } & 82,000 & \\
• \hline \text { Deferred Tax Asset } & & 82,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Deferred Tax Asset } & 82,000 & \\
• \hline \text { Income Tax Benefit } & & 82,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | r | r | }
• \hline \text { Income Tax Expense } & 117,600 & \\
• \hline \text { Income Tax Payable } & & 35,600 \\
• \hline \text { Deferred Tax Asset } & & 82,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | r | r | }
• \hline \text { Income Tax Expense } & 254,000 & \\
• \hline \text { Income Tax Payable } & & 172,000 \\
• \hline \text { Deferred Tax Asset } & & 82,000 \\
• \hline
• \end{array}\]

Analyze the impact of production level changes on income under both costing methods.

Determine the minimum acceptable price for special orders to increase profits.

Evaluate why and how income differs under variable and absorption costing depending on the number of units produced and sold.

Identify the costs included in product costs under both costing methods.

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Definitions:

Custody

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The practical physical tasks necessary to maintain family life.

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Practical tasks or activities aimed at achieving a specific goal or outcome.

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Narratives, often for children, shared before sleep to entertain, educate, or soothe.