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Question - Presented below is a condensed income statement for Aussie Direct Gear for its first year of business:
Revenues $330,000
Expenses $220,000
Income before taxes $110,000
The expenses include an accrual for bad debt expense of $9,950 in Year 1 and $9,650 during Year 2. Actual write offs occur in the year after the accrual. Aussie Direct Gear's effective income tax rate is 34%.
Required - How much will be reported as deferred income taxes at the end of Year 1?
A. $ 102 as Deferred tax liability
B. $ 102 as Deferred tax asset
C. $3,383 as Deferred tax asset
D. $3,383 as Deferred tax liability
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