At the End of 2020, Its First Year of Operations

question 32

Multiple Choice

At the end of 2020, its first year of operations, Gaucho Corp. prepared the following reconciliation between pre-tax accounting income and taxable income: $$\begin{array} { l r } \text { Pre-tax account ing income } & \$ 800,000 \\\text { Estimated lawsuit expense } & 400,000 \\\text { Excess CCA for tax purposes } & ( 900,000 ) \\\text { Taxable income } & \$ 300,000\end{array}$$ The estimated lawsuit expense of $ 400,000 will be deductible in 2021 when it is expected to be paid. Use of the depreciable assets will result in taxable amounts of $ 300,000 in each of the next three years. The income tax rate is 25% for all years. Gaucho adheres to IFRS requirements. The deferred tax asset to be recorded is

• A) $ 200,000.
• B) $ 160,000.
• C) $ 100,000.
• D) $ 60,000.

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Definitions:

Observations

Refers to the process of measuring or taking note of phenomena or data, usually as part of a scientific study or research.

Class Intervals

The range of values within which data points are grouped in frequency distribution, helping to organize data for analysis.

Histogram

A graphical representation of the distribution of numerical data through bars of varying heights, where each bar groups numbers into ranges.

Regional Managers

Individuals responsible for overseeing the operations, sales, and management of a company's branches in specific geographical areas.