Tamarisk Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,717,000 for the year ended December 31, 2023. During 2023, Tamarisk paid $250,000 for meals and entertainment expenses. In 2020, Tamarisk's tax accountant made a mistake when preparing the company's income tax return. In 2023, Tamarisk paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Tamarisk 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, Tamarisk rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years rent in advance. Tamarisk used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $404,000. For tax purposes, Tamarisk claimed the maximum capital cost allowance of $629,000. Tamarisk began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Tamarisk accrued $580,000 of warranty expenses: actual expenditures for 2023 were $279,000 with the remaining $301,000 anticipated in 2024. d that tax rates would be In 2023, Tamarisk was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be decreased to 33% for all future years beginning January 1, 2024 (a) Your answer is incorrect. Calculate the amount of any permanent differences for 2023. Permanent differences $ 18000
Tamarisk Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,717,000 for the year ended December 31, 2023. During 2023, Tamarisk paid $250,000 for meals and entertainment expenses. In 2020, Tamarisk's tax accountant made a mistake when preparing the company's income tax return. In 2023, Tamarisk paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Tamarisk 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, Tamarisk rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years rent in advance. Tamarisk used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $404,000. For tax purposes, Tamarisk claimed the maximum capital cost allowance of $629,000. Tamarisk began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Tamarisk accrued $580,000 of warranty expenses: actual expenditures for 2023 were $279,000 with the remaining $301,000 anticipated in 2024. d that tax rates would be In 2023, Tamarisk was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be decreased to 33% for all future years beginning January 1, 2024 (a) Your answer is incorrect. Calculate the amount of any permanent differences for 2023. Permanent differences $ 18000
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 50P
Related questions
Question
vi.3
Transcribed Image Text:Tamarisk Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,717,000 for the year ended
December 31, 2023.
During 2023, Tamarisk paid $250,000 for meals and entertainment expenses.
In 2020, Tamarisk's tax accountant made a mistake when preparing the company's income tax return. In 2023, Tamarisk paid $18,000
in penalties related to this error. These penalties were not deductible for tax purposes.
Tamarisk 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, Tamarisk rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years
rent in advance.
Tamarisk used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $404,000. For tax
purposes, Tamarisk claimed the maximum capital cost allowance of $629,000.
Tamarisk began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced
by its main competitor. In 2023, Tamarisk accrued $580,000 of warranty expenses: actual expenditures for 2023 were $279,000 with
the remaining $301,000 anticipated in 2024.
d that tax rates would be
Transcribed Image Text:In 2023, Tamarisk was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be
decreased to 33% for all future years beginning January 1, 2024
(a)
Your answer is incorrect.
Calculate the amount of any permanent differences for 2023.
Permanent differences
$
18000
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