Year 1 Year 2 Year 3 Accounting Income (loss) $150,000 $330,000 $(550,000) A...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Year 1 Year 2 Year 3
Accounting Income (loss) $150,000 $330,000 $(550,000)
A Capital Asset was purchased on January 1 of year 1 at a cost of $90,000.
Depreciation is $15,000 per year.
CCA is $17,000 in year 1, $16,000 in year 2 and $10,000 in year 3.
Warranty expense accrued on the financial statements is as follows: $8,000 in year 1,
$10,000 in year 2 and $9,000 in year 3.
Actual warranty claims paid is as follows: $5,000 in year 1, $11,000 in year 2 and $12,000 in year 3.
Golf Dues equal to $10,000 was paid in year 2 and golf dues of 10,800 was paid in year 3. There were no golf dues in year 1.
Tax rates are 35% in year 1, 37% in year 2 and 30% in year 3.
Assume that it is probable that the loss carry forward will be used in the future years.
Required:
1. Prepare a tax reconciliation for all three years.
2. Prepare the tax journal entries for all three years assuming IFRS. Show Calculations.
3. Assume the company had Taxable Income equal to $21,800 in year 4. Assume no adjustment is required for Temporary differences. What would be the Income Tax journal entries required in year 4? Assume year 4 had a tax rate of 28%.
4. Prepare the Loss Note disclosure required for Year 3.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
