Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Im in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book an purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability? OA. $14,000 deferred tax liability B. $28,000 deferred tax liability OC. $28,000 deferred tax asset OD. $14,000 deferred tax asset
Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Im in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book an purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability? OA. $14,000 deferred tax liability B. $28,000 deferred tax liability OC. $28,000 deferred tax asset OD. $14,000 deferred tax asset
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Included
in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for
book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book and tax
purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability?
OA. $14,000 deferred tax liability
B. $28,000 deferred tax liability
OC. $28,000 deferred tax asset
OD. $14,000 deferred tax asset](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5692e21b-ed8a-4246-82d5-0cd23767f13a%2Fb77ce6ef-8d23-403a-8830-eea7e16fcd42%2Fdqjg13j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Greenville Industries uses the accrual basis to account for all sales transactions. Sales for 2022 total $500,000. Included
in this amount is $70,000 in receivables from sales on installment. Installment sales are considered revenue for
book purposes, but not for tax purposes. Operating expenses total $170,000 and are treated the same for book and tax
purposes. Assuming a 40% tax rate, what is the amount of Greenville's deferred tax asset or liability?
OA. $14,000 deferred tax liability
B. $28,000 deferred tax liability
OC. $28,000 deferred tax asset
OD. $14,000 deferred tax asset
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