Use the Following Information for Questions

question 36

Multiple Choice

Use the following information for questions.
Mitchell Corporation prepared the following reconciliation for its first year of operations:

The temporary difference will reverse evenly over the next two years at an enacted tax rate of 40%.The enacted tax rate for 2011 is 35%.
-What amount should be reported in its 2011 income statement as the deferred portion of income tax expense?

• A)$90,000 debit
• B)$120,000 debit
• C)$90,000 credit
• D)$105,000 credit

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Definitions:

Ancillary Services

Secondary services that support or complement the primary services of an organization or system.

Product Mix

The total range of products or services offered by a company, encompassing various product lines, categories, and individual items.

Different Product Lines

A variety of product categories or groups offered by a single company, each catering to distinct customer needs or market segments.

Product Class

A broad category of goods or services that share common characteristics, function in a similar manner, and are targeted towards similar markets.