Cold, Inc, Reported a $100,000 Total Tax Expense for Financial Statement

question 28

Multiple Choice

Cold, Inc., reported a $100,000 total tax expense for financial statement purposes in year 1. This total expense consisted of $150,000 in current tax expense and a deferred tax benefit of $50,000. The deferred tax benefit consisted of $90,000 in deferred tax assets reduced by a valuation allowance of $40,000. In year 2, Cold reports $600,000 in book net income before tax. Cold records no other permanent or temporary book-tax differences. At the end of year 2, Cold's auditors determine that the existing valuation allowance of $40,000 should be reduced to zero. What is Cold's total tax expense for year 2?

• A) $250,000
• B) $126,000
• C) $86,000
• D) $40,000

Estimate demand using historical data and probability distributions.

Understand the concept of order policies and their effect on inventory levels.

Identify and calculate lost sales in given scenarios.

Apply Monte Carlo simulation to determine demand in different scenarios.

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Definitions:

Milliunits

A measurement unit equal to one-thousandth of a unit, often used in medical dosing.

Pitocin

A synthetic form of oxytocin used to induce labor by stimulating uterine contractions or to reduce bleeding after childbirth.

Dopamine Infusion

The administration of dopamine via an intravenous line to treat certain conditions, such as low blood pressure or heart failure.

DE-style Equations

Differential Equation-style equations; mathematical equations that relate functions with their derivatives, often used in modeling.