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Hey, I tried posting this on Yaeger’s message board but I was told that because it isn’t Wiley material they cannot answer it.
They didn’t cover anything with percentages in the lecture and I didn’t come across any questions with percentages in the Wiley software test bank CD so when I saw it on cpareviewforfree.com I got nervous.
Here is just one of the questions that I saw that included these percentages….
In Year One, the Alba Company has sales revenues of $500,000. The company has no other revenues and expenses except for bad debt expense of $200,000. Company officials expect the accounts to prove to be uncollectible as follows: $80,000 in Year Two, $70,000 in Year Three, and $50,000 in Year Four. The enacted tax rate is 26 percent in Year One and 27 percent thereafter. The company believes that there is 65 percent chance that it will have adequate taxable income in Year Two to absorb the bad debt expense but that likelihood drops to 53 percent in Year Three, and 47 percent in Year Four. On its Year One income statement, what does this company report as its total income tax expense?
Can Someone explain how these things work??
Exam on 8/27. Cram review week. Thanks!!
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