A e NIO a ll 76% i 14:05LTEabcSAVETextPenBrushDue to years of poor management, ShaoInc. had $350 million in Deferred Tax Assetdue to NOL carryforwards in its varioussubsidiaries around the world. At the endof 2012, Shao had a Valuation Allowanceof $280 million related to these DTAS. InJanuary 2013, Shao hired Dakota Jordanto take over the Liechtenstein subsidiary,which quickly returned to profitability. Atthe end of 2013, Shao decided that it was"more likely than not" that the Liechtensteinsubsidiary would be profitable enough to usethe NOLS in Liechtenstein by 2014 and madethe appropriate adjustment to the ValuationAllowance.Which of the following items would beincreased by the adjustment to the ValuationAllowance? (check all that apply)Total AssetsCash from Operating ActivitiesIncome Taxes PayableNet IncomeIncome Tax ExpenseВIU< >!!!!!!

The correct answer is NET INCOME

Due to years of poor management, Shao Inc. had $350 million in Deferred Tax Asset due to NOL carryforwards in its various subsidiaries around the world. At the end of 2012, Shao had a Valuation Allowance of $280 million related to these DTAS. In January 2013, Shao hired Dakota Jordan to take over the Liechtenstein subsidiary, which quickly returned to profitability. At the end of 2013, Shao decided that it was

Due to years of poor management, Shao Inc. had $350 million in Deferred Tax Asset due to NOL carryforwards in its various subsidiaries around the world. At the end of 2012, Shao had a Valuation Allowance of $280 million related to these DTAS. In January 2013, Shao hired Dakota Jordan to take over the Liechtenstein subsidiary, which quickly returned to profitability. At the end of 2013, Shao decided that it was

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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