Reference no: EM132972134

Problem 1: Tax rates other than the current tax rate may be used to calculate the future income tax amount on the SFP if

Select one:

a. it is probable that a future income tax rate change will occur.

b. it appears likely that a future income tax rate will be higher than the current tax rate.

c. the future income tax rates have been enacted or substantively enacted into law.

d. it appears likely that a future income tax rate will be less than the current tax rate.

e. it appears likely that the use of such other rates could establish a reduction of future income tax liability for the firm.

Problem 2: James Bond, Inc., owns 4,000,000 shares of xyz Corp Inc. On December 31, 2012, James distributed these shares as a dividend to its shareholders. This is an example of a

Select one:

a. property dividend.

b. stock dividend.

c. stock split.

d. liquidating dividend.

e. cash dividend.