Question

TIP SAVESS * You received no credit for this question in the previous attempt View previous stot You are preparing the financial statements for Arida Lid for the year ended December 31, 2019. Arida accounts for income tax using the balance sheet for liability approach. Which one of the following would most likely result in a future income tax asset on Arida's 2019 financial statements Multiple Choice A dividend is received from a subsidiary The dividend is not able The net ook value NBV) of equipment is greater than undepreciated capital cost (UOC) Agon sale of land is treated as a cool gain for s urses. As such only Son of the estable < Prev 18 a 20 ! Next >

Answer 1

Solution:

"An accrual of warranty cost is greater than the warranty cost paid during the year. Warranty cost are deductible for tax purposes when paid". This will result in Future income tax assets on Arida's 2019 financial statement because warrant expense will give rise to future deductible amount for tax purpose.

Hence last option is correct.