Use the Following Information for Questions

question 23

Multiple Choice

Use the following information for questions
The following trial balance of Terracota Corp.at December 31, 2010 has been properly adjusted except for the income tax expense adjustment.

Other financial data for the year ended December 31, 2010:
 Included in accounts receivable is $720,000 due from a customer and payable in quarterly instalments of $90,000.The last payment is due December 29, 2012.
 The balance in the Future Income Tax Liability account pertains to a temporary difference that arose in a prior year, of which $30,000 is classified as a current liability.
 During the year, estimated tax payments of $465,000 were charged to income tax expense.
The current and future tax rate on all types of income is 35 percent.In Terracota's December 31, 2010 balance sheet,
-The final retained earnings balance is

• A)$5,551,000.
• B)$6,016,000
• C)$5,135,000.
• D)$6,431,000.

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Definitions:

False Uniqueness Effect

The cognitive bias causing individuals to underestimate the commonality of their desirable traits or behaviors, believing they are more unique than they actually are.

Ethical Issues

Situations or problems requiring individuals or organizations to choose between actions that must be evaluated as right or wrong based on moral principles.

Unintended Negative Consequences

Outcomes that are not foreseen or intended and have a harmful or undesirable effect on individuals or communities.

Qualitative Research Methods

Research strategies that collect non-numerical data, such as interviews or observations, to understand concepts, thoughts, or experiences.