The Following Information Is Available for Ryan Corporation: Assets at Cost-$260,000

question 67

Multiple Choice

The following information is available for Ryan Corporation: Assets at cost-$260,000 (8 year life,straight-line depreciation,no salvage value,purchased 2 years ago) ; Accumulated depreciation-$65,000.Accumulated CCA-$105,300; CCA rate-30%; meals and entertainment recorded in the books-$12,000; golf dues paid and expensed on the books-$5,000; pre-tax accounting income-$40,000.No CCA was taken during the current year.Based on this information and a constant tax rate of 45%,which of the following would appear on the statement of financial position as a result of the information given above?

• A) An income tax liability of $45,000.
• B) A deferred tax asset of $3,510.
• C) A deferred tax liability of $3,510.
• D) A deferred tax asset of $18,135.
• E) A deferred tax liability of $18,135.

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Definitions:

Selling Price

The amount of money for which a product or service is sold to the customer.

Principal

An individual or entity that authorizes an agent to act on their behalf in legal or financial matters.

NPV Criterion

A financial metric used to assess the profitability of an investment, calculating the net present value of all cash flows associated with it.

Future Cash Flows

Estimates of the amount of money expected to be received or paid out in the future through investment, business operations, or other financial activities.