In 2020. Hudson Motors recorded an expense and corresponding liability to recognize potential losses relating to a car recall of $12 million. Its net income for the year was $200 million. It was not able to take a deduction for tax purposes until later years when it actually paid for the expenses related to this recall. In 2020, with respect to this, Hudson Motors would have: A. recognized a tax loss carryforward B. recognized a deferred tax liability. C. recognized a deferred tax asset D. recognized a deferred equity loss
In 2020. Hudson Motors recorded an expense and corresponding liability to recognize potential losses relating to a car recall of $12 million. Its net income for the year was $200 million. It was not able to take a deduction for tax purposes until later years when it actually paid for the expenses related to this recall. In 2020, with respect to this, Hudson Motors would have: A. recognized a tax loss carryforward B. recognized a deferred tax liability. C. recognized a deferred tax asset D. recognized a deferred equity loss
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Am. 152.
Transcribed Image Text:In 2020. Hudson Motors recorded an expense and corresponding liability to recognize potential losses relating to a car
recall of $12 million. Its net income for the year was $200 million. It was not able to take a deduction for tax purposes
until later years when it actually paid for the expenses related to this recall. In 2020, with respect to this, Hudson Motors
would have: A. recognized a tax loss carryforward B. recognized a deferred tax liability. C. recognized a deferred tax
asset D. recognized a deferred equity loss
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