At the end its first year of operations Hopkins Co prepared a reconciliation between pretax financial income and taxable income as follows Pretax financial income$1500000Estimated litigation expense2 000000Extra depreciation for taxes 3000000 Taxable income 500000The estimated litigation expense of $2000000 will be deductible in the following year when it is expected to be paid Use of the depreciable assets will result in taxable amounts of $1000000 in each of the next three years The income tax rate is 30 for all years The deferred tax asset to be recognized is

Wo firms, a and b, each currently dump 50 tons of chemicals into the local river. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution dumped into the river. it costs firm a $100 for each ton of pollution that it eliminates before it reaches the river, and it costs firm b $50 for each ton of pollution that it eliminates before it reaches the river. the government gives each firm 20 pollution permits. government officials are not sure whether to allow the firms to buy or sell the pollution permits to each other. what is the total cost of reducing pollution if firms are not allowed to buy and sell pollution permits from each other? what is the total cost of reducing pollution if the firms are allowed to buy and sell permits from each other? a. $3,000; $1,500 b. $4,500; $3,500 c. $4,500; $4,000 d. $4,500; $2,500