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7. XXX Limited has a product warranty liability valued at $12 000. The product warranty...

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Accounting

7. XXX Limited has a product warranty liability valued at $12 000. The product warranty costs are not tax deductible until paid out to customers. The company tax rate is 30%. The company has:

A) a taxable temporary difference of $12 000.

B) a deferred tax asset of $12 000.

C) a deductible temporary difference of $12 000.

D) a future deductible amount of $0.

E) a deferred tax liability of $12 000

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