Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31, 2023. During 2023, Sunland paid $77,000 for meals and entertainment expenses. In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 in penalties related to this error. These penalties were not deductible for tax purposes. Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years' rent in advance. Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For tax purposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of the year for $3,004,400. In 2023, Sunland began selling its products with a two-year warranty against manufacturing defects. In 2023, Sunland accrued $306,100 of warranty expenses: actual expenditures for 2023 were $88,200 with the remaining $217,900 anticipated in 2024. In 2023, Sunland was subject to a 25% income tax rate. During the year, the federal government announced that tax rates would be decreased to 23% for all future years beginning January 1, 2024. (a) Your answer is incorrect. Calculate the amount of any permanent differences for 2023. Permanent differences $ eTextbook and Media List of Accounts Save for Later Attempts: 2 of 3 used Submit Answer
Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31, 2023. During 2023, Sunland paid $77,000 for meals and entertainment expenses. In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 in penalties related to this error. These penalties were not deductible for tax purposes. Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years' rent in advance. Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For tax purposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of the year for $3,004,400. In 2023, Sunland began selling its products with a two-year warranty against manufacturing defects. In 2023, Sunland accrued $306,100 of warranty expenses: actual expenditures for 2023 were $88,200 with the remaining $217,900 anticipated in 2024. In 2023, Sunland was subject to a 25% income tax rate. During the year, the federal government announced that tax rates would be decreased to 23% for all future years beginning January 1, 2024. (a) Your answer is incorrect. Calculate the amount of any permanent differences for 2023. Permanent differences $ eTextbook and Media List of Accounts Save for Later Attempts: 2 of 3 used Submit Answer
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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Transcribed Image Text:Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31,
2023.
During 2023, Sunland paid $77,000 for meals and entertainment expenses.
In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 in
penalties related to this error. These penalties were not deductible for tax purposes.
Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At
the beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years'
rent in advance.
Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For tax
purposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of the
year for $3,004,400.
In 2023, Sunland began selling its products with a two-year warranty against manufacturing defects. In 2023, Sunland accrued
$306,100 of warranty expenses: actual expenditures for 2023 were $88,200 with the remaining $217.900 anticipated in 2024.
In 2023, Sunland was subject to a 25% income tax rate. During the year, the federal government announced that tax rates would be
decreased to 23% for all future years beginning January 1, 2024.
Your answer is incorrect.
Calculate the amount of any permanent differences for 2023.
Permanent differences
eTextbook and Media
List of Accounts
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