At the end of December 2013, Rosenfeld had $10,000 of Deferred Tax Assets relat. to its Allowance for Doubtful Accounts. In response to low public approval ratings (and after a particularly boisterous holiday party), the US Congress passed a law to reduce the Federal Statutory Tax Rate from 35% to 20% on December 31, 2013. As a US company, Rosenfeld had to immediately adjust the balance of its DTAS based on the new law. Which of the following items would be decreased by the entry to adjust the balance in Deferred Tax Assets? (check all that apply) Income Tax Expense Net Income Cash from Operating Activities Income Tax Payable Deferred Tax Assets

At the end of December 2013, Rosenfeld had $10,000 of Deferred Tax Assets relat. to its Allowance for Doubtful Accounts. In response to low public approval ratings (and after a particularly boisterous holiday party), the US Congress passed a law to reduce the Federal Statutory Tax Rate from 35% to 20% on December 31, 2013. As a US company, Rosenfeld had to immediately adjust the balance of its DTAS based on the new law. Which of the following items would be decreased by the entry to adjust the balance in Deferred Tax Assets? (check all that apply) Income Tax Expense Net Income Cash from Operating Activities Income Tax Payable Deferred Tax Assets

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

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abc
SAVE
Text
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At the end of December 2013, Rosenfeld
had $10,000 of Deferred Tax Assets relat
to its Allowance for Doubtful Accounts. In
response to low public approval ratings (and
after a particularly boisterous holiday party),
the US Congress passed a law to reduce the
Federal Statutory Tax Rate from 35% to 20%
on December 31, 2013. As a US company,
Rosenfeld had to immediately adjust the
balance of its DTAS based on the new law.
Which of the following items would be
decreased by the entry to adjust the balance
in Deferred Tax Assets? (check all that apply)
Income Tax Expense
Net Income
Cash from Operating Activities
Income Tax Payable
Deferred Tax Assets
В
I
U
!!!
I!!

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