Freeman Inc. reported a profit of $40,000 for 20A. The income tax return excluded a revenue item of $3,000 (reported on the income statement) because under the tax laws the $3,000 would not be reported for tax purposes until 20B. Assuming a 30% income tax rate, this situation would cause a 20A future tax amount of which of the following?
A) $3,000 (debit)
B) $900 (credit)
C) $900 (debit)
D) $3,000 (credit)
Correct Answer:
Verified
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