FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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Transcribed Image Text:Skysong Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,712,000 for the year ended
December 31, 2023.
During 2023, Skysong paid $240,000 for meals and entertainment expenses.
4
In 2020, Skysong's tax accountant made a mistake when preparing the company's income tax return. In 2023, Skysong paid $17,000 in
penalties related to this error. These penalties were not deductible for tax purposes.
Skysong 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, Skysong rented the building to SPK Inc. for two years at $260,000 per year. SPK paid the entire two years' rent
in advance.
Skysong used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $396,000. For tax
purposes, Skysong claimed the maximum capital cost allowance of $621,000,
Skysong 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, Skysong accrued $578,000 of warranty expenses: actual expenditures for 2023 were $277,000 with the
remaining $301,000 anticipated in 2024.
In 2023, Skysong 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.
EN
LE
Transcribed Image Text:Calculate the amount of any temporary differences for 2023.
Temporary differences $
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