BlueSky Broadcasting failed to make a year-end accrual of $420,000 for penalties due to a violation of FCC rules. Its tax rate is 40%. As a result of this error, net income was: (a) Unaffected (b) Overstated by $252,000 (c) Overstated by $168,000 (d) Overstated by $420,000

BlueSky Broadcasting failed to make a year-end accrual of $420,000 for penalties due to a violation of FCC rules. Its tax rate is 40%. As a result of this error, net income was: (a) Unaffected (b) Overstated by $252,000 (c) Overstated by $168,000 (d) Overstated by $420,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...

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I need guidance with this general accounting problem using the right accounting principles.

BlueSky Broadcasting failed to make a year-end accrual of
$420,000 for penalties due to a violation of FCC rules. Its
tax rate is 40%.
As a result of this error, net income was:
(a) Unaffected
(b) Overstated by $252,000
(c) Overstated by $168,000
(d) Overstated by $420,000

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