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D'Silva Limited Has a Product Warranty Liability Amounting to $10

Question 2

Multiple Choice

D'Silva Limited has a product warranty liability amounting to $10 000.The product warranty costs are not tax deductible until paid out to customers.The company tax rate is 30%.The company has:


A) a deductible temporary difference of $10 000
B) an taxable temporary difference of $10 000
C) a tax base of $10 000
D) a future deductible amount of $0.

Correct Answer:

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