SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 4BCRQ
Related questions
Question
- Drew Company has a
deferred tax asset of $54,000 before recording an allowance of $7000 for estimating it is more likely than not that this amount will not be realized in the future. The result of recording this allowance is- The deferred tax asset will now be a net amount of $47,000
- Income tax expense will be reduced by $7000 x the tax rate.
- Income tax expense will be increased by $7000 x the tax rate.
- Net income will be increased by $7000.
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