Multiple Choice
A company's income statement reported net income of $40,000 during 2014. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 2015. Which of the following statements is correct assuming a 35% tax rate?
A) A $3,000 deferred tax liability is reported as of December 31, 2014.
B) A $3,000 deferred tax asset is reported as of December 31, 2014.
C) A $1,050 deferred tax liability is reported as of December 31, 2014.
D) A $1,050 deferred tax asset is reported as of December 31, 2014
Correct Answer:
Verified
Correct Answer:
Verified
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