FGH Had a $1,200 Temporary Difference for Deferred Gross Margin

question 20

Multiple Choice

FGH had a $1,200 temporary difference for deferred gross margin on instalment sales at the end of 2012.This temporary difference will reverse equally during 2013, 2014 and 2015.The enacted corporate income tax rate is 48% and government is discussing a reduction in the corporate income tax rates for 2014 and 2015 to 38%.The deferred income tax liability related to this temporary difference at the end of 2013 would be:

• A)$192
• B)$384
• C)$576
• D)$248

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Definitions:

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, such as labor.

Productivity

Productivity measures the efficiency of production in terms of the amount of goods and services produced from a given amount of inputs, such as labor and capital, within a specific period.

Derived Demand

Derived demand refers to the demand for a good or service that originates from the demand for another good or service.

Final Demand

The demand for finished goods and services by consumers, businesses, and government, excluding intermediate goods.