During 2015,its First Year of Operations,a Company Recorded Depreciation Expense

question 84

Multiple Choice

During 2015,its first year of operations,a company recorded depreciation expense of $50,000 for book purposes.For tax purposes during 2015,$100,000 of depreciation expense was deducted.The temporary difference created during 2015 will reverse equally during 2016 and 2017.Book income from operations during the first year was $570,000.The income tax rate is 40%.The income tax expense to be reported in the income statement for the first year of operations is

• A)$228,000.
• B)$208,000.
• C)$248,000.
• D)$188,000.

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Definitions:

Balance of Payments

A summary of all transactions between residents of a country and the rest of the world over a specific period, including trade, investment, and financial transfers.

Exchange Rates

The value of one currency expressed in terms of another currency, determining how much foreign currency can be exchanged for a unit of domestic currency.

Gold Standard

A monetary system in which the standard economic unit of account is based on a fixed quantity of gold.

International Flows

The movement of goods, services, capital, and people across international borders.