EBK PRINCIPLES OF TAXATION FOR BUSINESS
22nd Edition
ISBN: 9781260161533
Author: Jones
Publisher: MCGRAW HILL BOOK COMPANY
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Question
Chapter 3, Problem 4QPD
To determine
Explain the reason for inconsistent decisions of Firm A and Firm Z in term of tax.
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Students have asked these similar questions
A friend says to you, “I don’t understand how taxable temporary differences can be ‘liabilities’ and how deductible temporary differences can be ‘assets.’ It seems to me that these temporary differences relate only to the future and that accounting is based on ‘historical cost.’ In addition, the government frequently changes the tax laws, so no one knows what the future tax laws will be.”
Required:
Prepare a written response for your friend that explains why deferred tax assets and deferred tax liabilities are recognized and reported on a corporation’s balance sheet. Include a discussion of a valuation allowance.
Which of the following statements NOT correct?
a.
If a taxpayer is not in agreement with the decision of the Tax Appeals Authority, there is no further action that the taxpayer can take.
b.
Where a taxpayer loss an appeal, the taxpayer is required to pay interest on the unpaid tax from the payment date statement on the Decision Notice.
c.
Tax planning within the confines of the tax laws is not illegal.
d.
Effective tax management may result in significant cost savings.
Jaime is a non-VAT seller of goods. Since he has no official receipts or invoices to support his expenses, he opted for the Optional Standard Deduction (OSD). When he filed his income tax return, he intentionally applied the rate of 20% on his gross sales. In this case, Jaime applied this type of scheme:
Capitalization
Shifting
Evasion
Avoidance
1st statement – The Legislative Department levies the taxes.
2nd statement – The Executive Department, through the Department of Finance’s line agency, the Bureau of Internal Revenue makes the assessment and collection of internal revenue taxes.
Only the 1st statement is true
Only the 2nd statement is true
Both statements are true
Both statements are false
Chapter 3 Solutions
EBK PRINCIPLES OF TAXATION FOR BUSINESS
Ch. 3 - Does the NPV of future cash flows increase or...Ch. 3 - Explain the relationship between the degree of...Ch. 3 - Does the after-tax cost of a deductible expense...Ch. 3 - Prob. 4QPDCh. 3 - Prob. 5QPDCh. 3 - Prob. 6QPDCh. 3 - Prob. 7QPDCh. 3 - Which type of tax law provision should be more...Ch. 3 - In the U.S. system of criminal justice, a person...Ch. 3 - Identify two reasons why a firms actual marginal...
Ch. 3 - Prob. 11QPDCh. 3 - Prob. 12QPDCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Use a 5 percent discount rate to compute the NPV...Ch. 3 - Consider the following opportunities: Opportunity...Ch. 3 - Prob. 6APCh. 3 - Refer to the income tax rate structure in the...Ch. 3 - Prob. 8APCh. 3 - Company N will receive 100,000 of taxable revenue...Ch. 3 - Prob. 10APCh. 3 - Investor B has 100,000 in an investment paying 9...Ch. 3 - Firm E must choose between two alternative...Ch. 3 - Company J must choose between two alternate...Ch. 3 - Firm Q is about to engage in a transaction with...Ch. 3 - Corporation ABC invested in a project that will...Ch. 3 - Prob. 16APCh. 3 - Investor W has the opportunity to invest 500,000...Ch. 3 - Prob. 18APCh. 3 - Prob. 19APCh. 3 - Prob. 20APCh. 3 - Prob. 21APCh. 3 - Prob. 1IRPCh. 3 - Firm V must choose between two alternative...Ch. 3 - Prob. 3IRPCh. 3 - Refer to the facts in problem 3. Company WB is...Ch. 3 - Prob. 5IRPCh. 3 - Prob. 6IRPCh. 3 - Prob. 7IRPCh. 3 - Prob. 8IRPCh. 3 - Prob. 9IRPCh. 3 - Prob. 1TPCCh. 3 - Firm D is considering investing 400,000 cash in a...
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