Clipp, Inc

question 88

Multiple Choice

Clipp, Inc., earns book net income before tax of $600,000. Clipp puts into service a depreciable asset this year, and first year tax depreciation exceeds book depreciation by $120,000. Clipp has recorded no other temporary or permanent book-tax differences. Assuming that the U.S. tax rate is 35%, what is Clipp's deferred income tax liability reported on its GAAP financial statements?

• A)$252,000
• B)$210,000
• C)$168,000
• D)$42,000

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Definitions:

Fight-or-Flight Response

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival.

Tend-and-Befriend Response

A behavior exhibited by some individuals under stress, characterized by nurturing activities designed to protect oneself and one's offspring, and forming social alliances rather than fighting or fleeing.

Great Stress

An intense state of physical or emotional strain or tension resulting from adverse or demanding circumstances.

Immune Function

The biological processes and mechanisms within an organism that protect against disease by identifying and killing pathogens and tumor cells.