The Following Information Was Taken from the Annual Report of Jones

question 91

Multiple Choice

The following information was taken from the annual report of Jones Inc.
$$\begin{array} { | l | l | c | } \hline & 2017 & \mathbf { 2 0 1 6 } \\\hline \text { BALANCE SHEET } & & \\\hline \text { Deferred incame tax liability } & \$ 29,700 & \$ 28,300 \\\hline & & \\\hline \text { INCOME STATEMENT } & & \\\hline \text { Incame befare taxes } & \$ 89,000 & \\\hline \text { Incame tax expense } & \mathbf {( 3 0 , 4 0 0 ) } & \\\hline \text { Net incame } & \$ 57,600 & \\\hline \text { Effective incame tax rate 40\% } & & \\\hline\end{array}$$
What is Jones's conservatism ratio?

• A)1.02
• B)1.52
• C)2.89
• D)1.21

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Definitions:

Quartzite

A hard, metamorphic rock formed from sandstone through heating and pressure, known for its durability and use in construction.

Marble

A metamorphic rock that is formed from the recrystallization of limestone or dolomite, often used in sculpture and as building material.

Schist

A shiny, foliated, metamorphic rock generally containing abundant visible crystals of mica.

Thrust Fault

A type of fault where the hanging wall moves up relative to the footwall, often associated with the compression of Earth's crust.