Cavan Company prepared the following reconciliation between book income and taxable income for the current year ended December 31, year 1. Pretax accounting income $1,000,000
Taxable income (600,000)
Difference $ 400,000 Book-tax differences:
Interest on municipal income $ 100,000
Lower financial depreciation300,000
Total$ 400,000
Cavan’s effective Federal and state income tax rate for year 1 is 30%. The depreciation difference will reverse equally over the next three years at enacted tax rates as follows.
Year Tax Rate Year 2 30% Year 3 25% Year 4 25%
In Cavan’s year 1 income statement, the deferred portion of its provision for income taxes should be: .
a. $120,000
b. $80,000
c. $100,000
d. $90,000

Suppose that the u. s. dollars-mexican pesos exchange rate is fixed by the u. s. and mexican governments. assume also that labor is mobile between the united states and mexico due to low transportation costs. which of the following situations is likely to happen as a result of a simultaneous increase in the demand for u. s. goods and decrease in the demand for mexican goods? (pick mexican unemployment rate increases, and the country undergoes bad economic times for a sustained u. s. unemployment rate increases, and the country undergoes bad economic times for a sustained mexican unemployment rate rises at first, but it soon drops as unemployed mexicans move to the united states for mexican unemployment rate rises at first, but then it drops as mexican pesos depreciate against u. s. dollars.