The following differences enter into the reconciliation of financial income and taxable income of Abbot Company for the year ended December 31, 2014, its first year of operations. The enacted income rate is 30% for all years.

Pertax accounting income $700,000

Excess tax depreciation (360,000)

Litigation accrual 70,000

Unearned rent revenue deferred on books but appropriately

recognized 60,000

Interest Income form New York municipal bonds (20,000)

Taxable income $450,000

1. Excess tax depreciation will reverse equally over a four-year period, 2015-2018

2. It is estimated that the litigation liability will be paid in 2018

3. Rent revenue will be recognized during last year lease, 2018

4. Interest revenue from New york bonds is expected to be $20,000 each year untill maturity at the end of 2018.

Instructions.

(a) Prepare a schedule of future taxable and (deductible) amounts

(b) Prepare a schedule of the deferred tax (assets) and liability at the end of year 2014.

(c) since this is the first year of operations, there is no beginnig deffered tax asset or liability. Compute the net deferred tax expense (benefit).

(d) Prepare the journal entry to record income tax expense, deffered taxes, and income taxes payable for 2014.

Because this market is a monopolistically competitive market, you can tell that it is in long-run equilibrium by the fact thatmr=mc at the optimal quantity for each firm. furthermore, a monopolistically competitive firm's average total cost in long-run equilibrium isless than the minimum average total cost. true or false: this indicates that there is a markup on marginal cost in the market for engines. true false monopolistic competition may also be socially inefficient because there are too many or too few firms in the market. the presence of the externality implies that there is too little entry of new firms in the market.

What are the weak points of economic costs that are part of a free enterprise economy?

Milden company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. as an aid in planning, the company has decided to start using a contribution format income statement. to have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: cost cost formula cost of good sold $35 per unit sold advertising expense $210,000 per quarter sales commissions 6% of sales shipping expense ? administrative salaries $145,000 per quarter insurance expense $9,000 per quarter depreciation expense $76,000 per quarter management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. units sold and the related shipping expense over the last eight quarters follow: quarter units sold shipping expense year 1: first 10,000 $ 119,000 second 16,000 $ 175,000 third 18,000 $ 190,000 fourth 15,000 $ 164,000 year 2: first 11,000 $ 130,000 second 17,000 $ 185,000 third 20,000 $ 210,000 fourth 13,000 $ 147,000 milden company’s president would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter. required: 1. using the high-low method, estimate a cost formula for shipping expe