Q25. Assume U.S.GAAP (generally accounting principles)applies unless otherwise noted.

An analyst gathered the following data far four profitable companies operating in the same industry:

Company       Deferred Tax Assets       Deferred Tax Liabilities

1                $50,000                  $200,000

2                $300,000                 $400,000

3                $85000                   $50,000

4                $170,000                 $115,000

If the applicable income tax rate is decreased and nothing else changes, which company will most likely experience the largest decrease in reported equity?

答案和详解如下：

Q25. D    Modular Level I, Vol. 3, PP.471-476     Study Session 10-44.e

1n the case of a tax rate decrease, the greatest reduction in reported equity would go to the firm with the largest net deferred tax asset. The net deferred tax asset far Company 4 is $55,000 {$170,000 -$15,000), which is the largest of the group.

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