Under the accrual method,what is the tax expense in F2014? $$\begin{array} { | l | r | r | r | }
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Deferred tax liability } & 27,000 & & \
\hline \text { Revenue } & & 100,000 & 150,000 \
\hline \text { Taxable income } & & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 35 \% & 35 \% \
\hline
\end{array}$$

Question

Under the accrual method,what is the tax expense in F2014? $$\begin{array} { | l | r | r | r | } 
\hline & \text { F2013 } & \text { F2014 } & \text { F2015 } \
\hline \text { Deferred tax liability } & 27,000 & & \
\hline \text { Revenue } & & 100,000 & 150,000 \
\hline \text { Taxable income } & & 95,000 & 105,000 \
\hline \text { Tax rate } & 30 \% & 35 \% & 35 \% \
\hline
\end{array}$$

Quizplus · Accepted Answer

The tax expense under the accrual method is calculated as the tax rate for F2014 (35%) multiplied by the taxable income for F2014 (95,000), which equals 33,250. Additionally, the change in deferred tax liability needs to be considered. The deferred tax liability for F2014 is not given, but assuming it remains the same as F2013, the tax expense would be 33,250 + 6,250 (change in deferred tax liability from 27,000 to 33,250) = 39,500.

Under the Accrual Method,what Is the Tax Expense in F2014