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The following information pertains to Entiguan Sports for the 2006 year-end. The treatment of items...

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Accounting

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The following information pertains to Entiguan Sports for the 2006 year-end. The treatment of items for accounting and tax purposes is based on fictitious accounting and tax standards and is not specific to a particular jurisdiction. Calculate the tax base and carrying amount for each item. 1. Donations : Entiguan Sports made donations of 100,000 in the current fiscal year. The donations were expensed for fi nancial reporting purposes, but are not tax deductible based on applicable tax legislation. 2. Interest received in advance : Entiguan Sports received in advance interest of 300,000. The interest is taxed because tax authorities recognize the interest to accrue to the company (part of taxable income) on the date of receipt. 3. Rent received in advance : Entiguan recognized 10 million for rent received in advance from a lessee for an unused warehouse building. Rent received in advance is deferred for accounting purposes but taxed on a cash basis. 4.Loan: Entiguan Sports secured a long-term loan for 550,000 in the current fiscal year. Interest is charged at 13.5 percent per annum and is payable at the end of each fiscal year

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