NEW QUESTION 88
At year-end year 1, Health entities should report a US $120,000 warranty liability in its balance sheet. The warranty liability is equal to the US $150,000 warranty expense minus the US $30,000 warrant cost actually incurred in Year 1. Because warranty costs are not deductible until paid, the tax base of the warranty liability is 0. The result is a US $120,000 temporary difference US$120,000 carrying amount tax base). When the liability is settled through the actually incurrence of warranty costs, the amounts will be deductible. Thus, the temporary difference should be classified as a deductible temporary difference.
NEW QUESTION 94
The entity is currently paying an annual rate of 25.2% as determined below) to obtain trade credit and pay at the end of the credit period. This policy should be continued if trade credit is the only source of financing, or if other sources are available only at a higher rate. The annual rate is determined as follows If the entity pays Web Master within 10 days. it will US $500 2% X $25,000). Thus the entity is effectively paying US $500 to retain US $24,500 $25,000 – $500) for 20 days 30 – 10). The annualized interest rate on this borrowing is 36.7346% [(US $500 – $24,500) x 360 days – 20 days)]. The annualized rate on this borrowing is 36,7346% [(US $500 – $24,500) x 360 days – 20 days)]. Similarly the entity 90
NEW QUESTION 100
First, the opportunity loss matrix must be prepared:
C:\Documents and Settings\usernwz1\Desktop\1.PNG The expected opportunity loss from selecting location L4 is thus US $5.50 [($3 x 0.3) + ($4
x 0.4) + ($10 x)
