Use the Following Information for Questions

question 47

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 current assets total is

• A)$5,955,000.
• B)$5,595,000.
• C)$3,060,000.
• D)$4,495,000.

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Definitions:

Consumer Price Index

An indicator that calculates the weighted mean of the cost of a selection of consumer products and services, used to signify the rate of inflation.

Cost of Living

Cost of Living refers to the amount of money needed to cover basic expenses such as housing, food, taxes, and healthcare in a certain place and time.

Inflation Rate

The increase pace in the cost of living, as reflected in goods and services prices, leading to reduced money value.

Consumer Price Index

A measure assessing the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.