FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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A-5

For the year ended December 31, 2023, Nash Ltd. reported income before income taxes of $190,500. Prior to 2023 taxable income
and accounting income was the same each year.
In 2023, Nash Ltd. paid $123,900 for advertising; of this amount, $41,300 was expensed in 2023. The remaining $82,600 was treated
as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $123,900 was
deductible for tax purposes in 2023.
The company paid $32,500 in 2023 for membership in a local golf club (which was not deductible for tax purposes).
In 2023 Nash Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $25,200, of which
$20,300 was actual repairs for 2023 and the remaining $4,900 was estimated repairs to be completed in 2024.
Meal and entertainment expenses totalled $43,200 in 2023, only half of which were deductible for income tax purposes.
Depreciation expense for 2023 was $104,900. Capital Cost Allowance (CCA) claimed for the year was $136,700. Depreciation and
CCA relate to an asset that was purchased on January 1, 2023 for $524,500.
Nash was subject to a 25% income tax rate for 2023. Nash follows IFRS.
(d)
Record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.)
Account Titles and Explanation
Debit
Credit
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Transcribed Image Text:For the year ended December 31, 2023, Nash Ltd. reported income before income taxes of $190,500. Prior to 2023 taxable income and accounting income was the same each year. In 2023, Nash Ltd. paid $123,900 for advertising; of this amount, $41,300 was expensed in 2023. The remaining $82,600 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $123,900 was deductible for tax purposes in 2023. The company paid $32,500 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Nash Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $25,200, of which $20,300 was actual repairs for 2023 and the remaining $4,900 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $43,200 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $104,900. Capital Cost Allowance (CCA) claimed for the year was $136,700. Depreciation and CCA relate to an asset that was purchased on January 1, 2023 for $524,500. Nash was subject to a 25% income tax rate for 2023. Nash follows IFRS. (d) Record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit Credit
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