Larsen Corporation Reported $100,000 in Revenues in Its 2014 Financial

question 126

Multiple Choice

Larsen Corporation reported $100,000 in revenues in its 2014 financial statements, of which $33,000 will not be included in the tax return until 2015. The enacted tax rate is 40% for 2014 and 35% for 2015. What amount should Larsen report for deferred income tax liability in its balance sheet at December 31, 2014?

• A) $11,550
• B) $13,200
• C) $14,700
• D) $16,800

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Definitions:

Contractual Relations

The legal obligations and rights established between parties who have entered into a contract.

Disparagement

A form of defamation that specifically refers to false statements made about a business's products or services, which cause financial harm.

Fraudulent Misrepresentation

The intentional act of making a false statement about an important fact to induce another person into entering a contract or transaction.

Intentional Harm

Deliberate actions taken by an individual or entity that are meant to cause injury or damage to another.