JiangCo Constructs the Following Table in Determining How to Apply

question 67

Multiple Choice

JiangCo constructs the following table in determining how to apply ASC 740-10 to its filing position for a transfer pricing issue.Its book-tax provision for the year, including $3 million for the uncertain transfer pricing issue, is $10 million. Under ASC 740-10, JiangCo's book income tax expense for this item is:

• A)$13 million.
• B)$11.6 million.
• C)$11.4 million.
• D)$10 million.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic or decision.

Explicit Bias

Prejudice or favoritism toward a group or individual that is consciously identified and directly expressed by an individual.

Just-World Phenomenon

The cognitive bias to believe that the world is inherently fair, causing people to rationalize an unfortunate situation as deserved by the victim.

Ingroup Bias

The tendency to favor members of one's own group over those in other groups in terms of preference, trust, and favoritism.