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When will Tanner income statement prepared for GAAP

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QUESTION - The Tanner Co.'s workers perform their duties in 2019, but their compensation of $1,000 is not paid until 2020. Under GAAP rules, Tanner records wage expense and wages payable in 2019; the payable is reversed and cash reduced in 2020. Under income tax rules, Tanner expenses the $1,000 when payment is made in 2020. If the tax rate is 20%, when will Tanner's income statement prepared for GAAP purposes most likely report $200 of income tax savings related to this transaction?

a. Never

b.2019

c. 2020

d. Both 2019 and 2020

Reference no: EM132676942

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