[accthelp]

Alpha retailers accrues sales returns for reporting to shareholders. Over 2001, its balance of Reserve for returns decreased by $10,000. The IRS allows a deduction only for actual returns. There are no other differences between tax and income reporting. The tax rate is 30%. In 2001 these facts will result in:
(a) an increase in deferred tax assets of $3,000 (b) a decrease in deferred tax assets of $3,000
(c) an increase in deferred tax assets of $7,000 (d) a decrease in deferred tax assets of $7,000
(e) an increase in deferred tax liab. Of $3,000 (f) a decrease in deferred tax liab. Of $3,000
(g) an increase in deferred tax liab. Of $7,000 (h) a decrease in deferred tax liab. Of $7,000

Please provide me an explanation - so I can learn and not just the answer. Thanks

[Curlyben]

Please refer to this Announcement