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12 Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the following: Non-taxable interest revenue from municipal bonds Warranty expenses (not tax deductible until actually provided; none provided this year) $25,000 10,000 The income tax rate is 40%. Which ONE of the following is reported in Woodland Hills Company's balance sheet at the end of the year? Deferred Tax Asset, $10,000 Deferred Tax Liability, $4,000 Deferred Tax Asset, $4,000 Income Taxes Payable, $14,000

12 Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the following: Non-taxable interest revenue from municipal bonds Warranty expenses (not tax deductible until actually provided; none provided this year) $25,000 10,000 The income tax rate is 40%. Which ONE of the following is reported in Woodland Hills Company's balance sheet at the end of the year? Deferred Tax Asset, $10,000 Deferred Tax Liability, $4,000 Deferred Tax Asset, $4,000 Income Taxes Payable, $14,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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12 Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the following: Non-taxable interest revenue from municipal bonds Warranty expenses (not tax deductible until actually provided; none provided this year) $25,000 10,000 The income tax rate is 40%. Which ONE of the following is reported in Woodland Hills Company's balance sheet at the end of the year? Deferred Tax Asset, $10,000 Deferred Tax Liability, $4,000 Deferred Tax Asset, $4,000 Income Taxes Payable, $14,000
Transcribed Image Text:12 Woodland Hills Company reported income before taxes (pretax financial income) in its income statement of $60,000. Among the items included in the computation of pretax financial income were the following: Non-taxable interest revenue from municipal bonds Warranty expenses (not tax deductible until actually provided; none provided this year) $25,000 10,000 The income tax rate is 40%. Which ONE of the following is reported in Woodland Hills Company's balance sheet at the end of the year? Deferred Tax Asset, $10,000 Deferred Tax Liability, $4,000 Deferred Tax Asset, $4,000 Income Taxes Payable, $14,000
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