Notes to the Year 2 financial statements of Care Corporation indicate that income tax expense of $3,000 comprises $2,000 currently payable taxes and $1,000 deferred to future periods. Care Corporation made the following entry during Year 2 to recognize income tax expense: Income Tax Expense . . . . . . . . . . . . . . 3,000 Income Tax Payable . . . . . . . . . . . . . . . . . . . . . . . . 2,000
Deferred Income Taxes Payable . . . . . . . . . . . . . . . 1,000 The $1,000 of deferred income taxes reduced net income but did not require a cash outflow during Year 2 . To explain the change in the Deferred Income Taxes account, the T-account work sheet must.
a. subtract deferred income taxes from net income to derive cash flow from operations.
b. add back deferred income taxes to net income to derive cash flow from operations.
c. add back deferred income taxes to net income to derive cash flow from financing.
d. subtract deferred income taxes from net income to derive cash flow from financing.
e. add back deferred income taxes to net income to derive cash flow from investing.
B
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Which of the following is not one of the techniques that can be used to identify whether a time series is truly random?
a. a graph (plot the data) b. the runs test c. a control chart d. the autocorrelations (or a correlogram)
Managerial problems include
a. venture capital relationship problems. b. unclear business definition. c. concept of a team approach. d. assuming debt too early.
Company managers strive to gradually increase dividend series over the long-term future
Indicate whether this statement is true or false.
A "U.S. shareholder" for purposes of CFC classification is any U.S. person who owns directly, indirectly, and constructively at least 50% of the voting power of a foreign corporation
a. True b. False Indicate whether the statement is true or false