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

question 115

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 tax purposes,the CCA deduction was $9,000.What amount of deferred income tax (benefit) expense will be recognized for this year? Assume no beginning deferred tax amounts and a constant tax rate of 40%.

• A) A $2,000 deferred tax benefit.
• B) A $2,000 deferred tax expense.
• C) A $6,800 deferred tax benefit.
• D) A $6,800 deferred tax expense.

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Definitions:

Communicative Element

A component or feature that facilitates communication, such as a symbol, sign, or medium.

Passing

The ability of an individual to be regarded as a member of an identity group or category different from their own, often used within the contexts of gender, race, or social status.

Disclosure

The action of making new or secret information known.

Professionalism

characterizes the conduct, aims, or qualities that define or mark a profession or professional person, often involving competence, ethical behavior, and adherence to standards.