Which of the following statements is correct? a. If a security saw that a firmâs daysâ sales outstanding (DSO) was higher than the industry average, and was increasing and trending still higher, this would be interpreted as a sign strength.
b. A high average DSO indicates that none of this customers are paying on time. In addition, it makes no sense to evaluate the firmâs DSO with the firm credit terms.
c. There is no relationship between the daysâ sales outstanding DSO and the average collection period ACP. These ratios measure entirely different things.
d. A reduction in accounts receivable would have no effect on the current ratio, but it would lead to an increase in the quick ratio.
e. If a firm increases its sales while holding its accounts receivable constant, then, other things held constant, its daysâ sales outstanding will decline.

Bridgeport company began operations at the beginning of 2018. the following information pertains to this company. 1. pretax financial income for 2018 is $115,000. 2. the tax rate enacted for 2018 and future years is 40%. 3. differences between the 2018 income statement and tax return are listed below: (a) warranty expense accrued for financial reporting purposes amounts to $7,500. warranty deductions per the tax return amount to $2,200. (b) gross profit on construction contracts using the percentage-of-completion method per books amounts to $94,700. gross profit on construction contracts for tax purposes amounts to $67,100. (c) depreciation of property, plant, and equipment for financial reporting purposes amounts to $61,800. depreciation of these assets amounts to $75,700 for the tax return. (d) a $3,600 fine paid for violation of pollution laws was deducted in computing pretax financial income. (e) interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. 4. taxable income is expected for the next few years. (assume (a) is short-term in nature; assume (b) and (c) are long-term in nature.) (a) prepare the reconciliation schedule for 2017 and future years. (b) prepare the journal entry to record income tax expense for 2017. (c) prepare the income tax expense section of the income statement beginning with “income before income taxes.” (d) determine how the deferred taxes will appear on the balance sheet at the end of 2017.