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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
Save for Later
Attempts: 2 of 3 used
Submit Answer
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