Inferno Inc. is embroiled in a lawsuit. In 2022, they recognize that a loss of $65,000 is probable. Given a tax rate of 40%, how will this be treated in the accounting records? OA. deferred tax liability of $26,000 B. deferred tax asset of $65,000 OB. O C. deferred tax liability of $65,000 OD. deferred tax asset of $26,000
Inferno Inc. is embroiled in a lawsuit. In 2022, they recognize that a loss of $65,000 is probable. Given a tax rate of 40%, how will this be treated in the accounting records? OA. deferred tax liability of $26,000 B. deferred tax asset of $65,000 OB. O C. deferred tax liability of $65,000 OD. deferred tax asset of $26,000
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 70IIP
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Transcribed Image Text:Inferno Inc. is embroiled in a lawsuit. In 2022, they recognize that a loss of $65,000 is probable. Given a tax rate of 40%, how will this be treated in the accounting records?
OA. deferred tax liability of $26,000
B. deferred tax asset of $65,000
OB.
O C. deferred tax liability of $65,000
OD. deferred tax asset of $26,000
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