Ivanhoe Corporation purchased equipment very late in 2023. Based on generous capital cost allowance rates provided in the Income Tax Act, Ivanhoe claimed CCA on its 2023 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $26,200 in 2024, $38,600 in 2025, and $45,000 in 2026. Ivanhoe's accounting income for 2023 is $239,600 and the tax rate is 30% for all years. There are no deferred tax accounts at the beginning of 2023.

Ivanhoe Corporation purchased equipment very late in 2023. Based on generous capital cost allowance rates provided in the Income Tax Act, Ivanhoe claimed CCA on its 2023 tax return but did not record any depreciation because the equipment was being tested. This temporary difference will reverse and cause taxable amounts of $26,200 in 2024, $38,600 in 2025, and $45,000 in 2026. Ivanhoe's accounting income for 2023 is $239,600 and the tax rate is 30% for all years. There are no deferred tax accounts at the beginning of 2023.

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 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...

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