Question

At december 31, 2006, control enterprises had the following deferred income tax items: deferred income tax liability of $24 million related to a current asset deferred income tax asset of $18 million related to a current liability deferred income tax liability of $40 million related to a noncurrent asset deferred income tax asset of $12 million related to a noncurrent liability control enterprises should report in the current section of its december 31, 2006, balance sheet a:

a) noncurrent asset of $30,000 and a non-current liability of $64,000.
b) current asset of $6,000.
c) noncurrent asset of $28,000 and a non-current liability of $15,000.
d) noncurrent liability of $10,000.

Answer 1

The correct answer is option b. Control Enterprises should report a current liability of $6,000 on its December 31, 2006, balance sheet.

Step-by-step explanation:

Control Enterprises should report a current liability of $6,000 on its December 31, 2006, balance sheet.

To determine the appropriate amount to report in the current section of the balance sheet, we need to compare the deferred income tax liabilities and assets related to current items. In this case, the deferred income tax liability related to a current asset is $24 million, while the deferred income tax asset related to a current liability is $18 million. Since the liability is greater than the asset, the net amount is a current liability.

Therefore, the correct option is (b) current asset of $6,000.