Quiz%204 - 4. What should Tringali report as its income tax...

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Quiz 4 (20 points) 1. Which of the following circumstances creates a future taxable amount? A. Service fees collected in advance from customers: taxable when received, recognized for financial reporting when earned. B. Accrued compensation costs for future payments. C. Straight-line depreciation for financial reporting and accelerated depreciation for tax reporting. D. Investment expenses incurred to obtain tax-exempt income (not tax deductible) 2. For its first year of operations Tringali Corporation's reconciliation of pretax accounting income to taxable income is as follows: Tringali's tax rate is 40%. Assume that no estimated taxes have been paid. What should Tringali report as income tax payable for its first year of operations? A. $120,000. B. $114,000. C. $106,000. D. $ 8,000. $265,000 40% = $106,000 3 .What should Tringali report as its deferred income tax liability as of the end of its first year of operations? A. $35,000. B. $20,000. C. $14,000. D. $ 8,000.
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Unformatted text preview: 4. What should Tringali report as its income tax expense for its first year of operations? A. $120,000. B. $114,000. C. $106,000. D. $8,000. 5. The valuation allowance account that is used in conjunction with deferred tax assets is a(n): A. Liability. B. Component of shareholders' equity. C. Asset. D. Contra asset. 6. In reconciling net income to taxable income, interest earned on municipal bonds is: A. Ignored. B. A temporary difference. C. A reversing difference. D. A permanent difference. 7. A deferred tax asset represents a: A. Future income tax benefit. B. Future cash collection. C. Future tax refund. D. Future amount of money to be paid out. 8. In the statement of cash flows, using the indirect method for determining cash flows from operating activities, a decrease in deferred tax liabilities is: A. Added to net income. B. Subtracted from net income. C. Ignored. D. Included under financing activities....
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Quiz%204 - 4. What should Tringali report as its income tax...

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