A Firm Reported the Following in Its Income Statement for the Current

question 68

Multiple Choice

A firm reported the following in its income statement for the current year: depreciation expense, $4,000; pollution violation fine, $12,000; pre-tax accounting income, $10,000.The tax rate is 40% for the current year, and no changes to this rate are foreseen in the near term.For tax purposes, the CCA deduction was $9,000.What amount of deferred income tax (benefit) expense will be recognized for this year? Assume a beginning Deferred Tax asset balance of $4,000.

• A)A $2,000 deferred tax benefit.
• B)A $6,000 deferred tax benefit.
• C)A $6,000 deferred tax expense.
• D)A $2,000 deferred tax expense.

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Definitions:

Right to Purchase

A legal agreement giving an individual or entity the option to buy something at a predetermined price within a specific timeframe.

Facilities and Services

Pertains to the physical locations and auxiliary aids provided by a business to support its operations and enhance customer experience.

Title III

Refers to a specific section within a law or regulation, which varies by context, commonly associated with education, disabilities, or financial regulations.

Chapter 11 Bankruptcy

Chapter 11 Bankruptcy is a form of bankruptcy that involves a reorganization of a debtor's business affairs, debts, and assets, enabling a business to maintain operations while restructuring its obligations.