For Calendar 2020, Its First Year of Operations, Snow Corp $$\begin{array} { l r } 2021 & \$ 90,000 \\2022 & 45,000 \\2023 & 45,000 \\2024 & 90,000\end{array}$$

question 67

Multiple Choice

For calendar 2020, its first year of operations, Snow Corp. reported pre-tax accounting income of $ 330,000 and taxable income of $ 600,000. The only reversible difference is accrued warranty costs, which are expected to be paid as follows: $$\begin{array} { l r } 2021 & \$ 90,000 \\2022 & 45,000 \\2023 & 45,000 \\2024 & 90,000\end{array}$$ The enacted income tax rates are 35% for 2020, 30% for 2021, 2022 and 2023, and 25% for 2024. The deferred tax asset reported on Snow's December 31, 2020 SFP should be

• A) $ 54,000.
• B) $ 63,000.
• C) $ 76,500.
• D) $ 94,500.

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Definitions:

Input Prices

The costs associated with purchasing the raw materials, labor, and other factors of production required to produce goods or services.

Industry Expands

The process of growth within a specific sector of the economy, characterized by an increase in output, sales, or the number of operators.

Average Total Cost Curve

A graphical representation showing the average total cost of producing different quantities of output.

Purely Competitive Firm

A company that operates in a market where there are many buyers and sellers, the products are homogeneous, and there are no barriers to entering or exiting the market.