Question2: (v) A reconciliation of pretax financial statement income to taxable income is shown below for Fieval Industries for the year ended December 31, 2009, its first year of operations. The income tax rate is 40%. Pretax accounting income (income statement) $300,000 Interest revenue on municipal securities -15,000 Warranty expense in excess of deductible amount 25,000 Depreciation in excess of financial statement amount -70,000 Taxable income (tax return) $240,000 What amount(s) should Fieval report related to deferred income taxes in its 2009 balance sheet? A. Current asset of $10,000 and noncurrent liability of $28,000. B. Noncurrent liability of $18,000. C. Current asset of $4,000 and noncurrent liability of $28,000. D. Noncurrent liability of $24,000.
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