A e O Y l 66% 14:18Vo)LTEabcSAVETextPenBrushDue to years of poor management, ShaoInc. had $350 million in Deferred Tax Assetdue to NOL carryforwards in its varioussubsidiaries around the world. At the endof 2012, Shao had a Valuation Allowanceof $280 million related to these DTAS. InJanuary 2013, Shao hired Dakota Jordanto take over the Liechtenstein subsidiary,which quickly returned to profitability. Atthe end of 2013, Shao decided that it was"more likely than not" that the Liechtensteinsubsidiary would be profitable enough to usethe NOLS in Liechtenstein by 2014 and madethe appropriate adjustment to the ValuationAllowance.Which of the following items would beincreased by the adjustment to the ValuationAllowance? (check all that apply)Net IncomeIncome Tax ExpenseIncome Taxes PayableTotal AssetsCash from Operating ActivitiesВIU< >!!!!!!

Answered: Due to years of poor management, Sha…

Due to years of poor management, Sha nc. had $350 million in Deferred Tax As due to NOL carryforwards in its various subsidiaries around the world. At the e of 2012, Shao had a Valuation Allowanc

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Chapter8: Consolidated Tax Returns

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Problem 35P

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Question

A e O Y l 66% 14:18
Vo)
LTE
abc
SAVE
Text
Pen
Brush
Due to years of poor management, Shao
Inc. had $350 million in Deferred Tax Asset
due to NOL carryforwards in its various
subsidiaries around the world. At the end
of 2012, Shao had a Valuation Allowance
of $280 million related to these DTAS. In
January 2013, Shao hired Dakota Jordan
to take over the Liechtenstein subsidiary,
which quickly returned to profitability. At
the end of 2013, Shao decided that it was
"more likely than not" that the Liechtenstein
subsidiary would be profitable enough to use
the NOLS in Liechtenstein by 2014 and made
the appropriate adjustment to the Valuation
Allowance.
Which of the following items would be
increased by the adjustment to the Valuation
Allowance? (check all that apply)
Net Income
Income Tax Expense
Income Taxes Payable
Total Assets
Cash from Operating Activities
В
I
U
< >
!!!
!!!

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