Snifful Industries Has a Depreciable Asset That Is Estimated for Accounting

question 29

Multiple Choice

Snifful Industries has a depreciable asset that is estimated for accounting purposes to have a useful life of 7 years.For taxation purposes the useful life is 3 years.The asset was purchased at the beginning of year 1,there is no residual value,and the straight-line method of depreciation is used for both tax and accounting purposes.The tax rate is 30% and the cost of the asset is $210 000.What is the amount of the deferred tax liability account generated by this asset at the end of years 2,3 and 4?

• A) End of year 2: $24 000; year 3: $36 000; year 4: $27 000
• B) End of year 2: $80 000; year 3: $120 000; year 4: $90 000
• C) End of year 2: $12 000; year 3: $24 000; year 4: $36 000
• D) End of year 2: $12 000; year 3: $12 000; year 4: $(9000)

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Definitions:

Trait Theorists

Psychologists who aim to understand personality by identifying and measuring the traits that underlie individual behaviors and attitudes.

Cattell

An influential psychologist known for his research on personality, intelligence testing, and the application of factor analysis in psychology.

Allport

Refers to Gordon Allport, an American psychologist known for his theory of personality that emphasized the uniqueness of the individual and the concept of personal dispositions.

Collectivistic

A cultural orientation that emphasizes the needs, goals, and views of the group over those of the individual.