Under US GAAP, which of the following approaches would be used to determine income tax expense?

ABC Company recorded goods in transit purchased FOB shipping point at year end as purchases. The goods were excluded from ending inventory. What effect does the omission have on ABC's assets and retained earnings at year end?

In Year 1, a company has revenues of $600,000 and expenses of $400,000. Of the expenses, $70,000 represents a warranty on a company product. However, the company only paid $30,000 as a result of this warranty. The remainder is expected to be paid in a future year in which company officials believe there is a 60% chance that the company will have taxable income to be reduced by this warranty cost. The relevant tax rate is 30% for Year 1 and 32% for periods after that. What is the total amount of income tax expense to be recognized in Year 1?

A firm's ending inventory balance was overstated by $1,000. Which of the following statements is correct according to a periodic inventory system?

The Faulkner Company had an enacted income tax rate of 25%. The company ended Year 1 with a deferred income tax liability of $30,000, a deferred income tax asset of $40,000, and a valuation allowance of $9,000. The enacted tax rate at the beginning of Year 2 was raised to 28%. The company ended Year 2 with a deferred income tax liability of $60,000, a deferred income tax asset of $30,000, and a valuation allowance of $14,000. On the company's Year 2 income statement, what is the amount of income tax expense (deferred) that is reported?

The Motown Company produces cars. When a customer buys a car, the company issues a warranty guaranteeing that any defects found within three years will be fixed free of charge. Cars are sold during Year 3 and none are brought in for repair, though the company expects to incur $3,000,000 before the time limit expires. Motown has considerable evidence to believe that it will continue to be profitable for the foreseeable future. Which of the following results from sales that are made in Year 3?