Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. rew company has a deferred tax asset of $54,000 be

rew Company has a deferred tax asset of $54,000 before recording an allowance of $7000...

80.2K

Verified Solution

Question

Accounting

rew Company has a deferred tax asset of $54,000 before recording an allowance of $7000 for estimating it is more likely than not that this amount will not be realized in the future. The result of recording this allowance is

a. The deferred tax asset will now be a net amount of $47,000

b. Income tax expense will be reduced by $7000 x the tax rate.

c. Income tax expense will be increased by $7000 x the tax rate.

d. Net income will be increased by $7000.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students