(a) Your Answer Correct Answer (Used) Calculate the amount of capital cost allowance and depreciation expense for 2022 and 2023, and the corresponding carrying amount and undepreciated capital cost of the depreciable assets at the end of 2022 and 2023. (b) Capital Cost Undepreciated Allowance Capital Cost 429,000 1,001,000 200,200 Depreciation Expense 178,750 Net Book Value 1,251,250 800,800 178,750 1,072,500 Determine the amount of current and deferred tax expense for 2023. Current income tax expense Deferred tax expense
(a) Your Answer Correct Answer (Used) Calculate the amount of capital cost allowance and depreciation expense for 2022 and 2023, and the corresponding carrying amount and undepreciated capital cost of the depreciable assets at the end of 2022 and 2023. (b) Capital Cost Undepreciated Allowance Capital Cost 429,000 1,001,000 200,200 Depreciation Expense 178,750 Net Book Value 1,251,250 800,800 178,750 1,072,500 Determine the amount of current and deferred tax expense for 2023. Current income tax expense Deferred tax expense
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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Transcribed Image Text:The following information applies to Wildhorse Corporation, which reports under IFRS.
1.
Prior to 2022, taxable income and accounting income were identical.
2. Accounting income was $1.7 million in 2022 and $1.49 million in 2023.
3.
On January 1, 2022, equipment costing $1.43 million was purchased. It is being depreciated on a straight-line basis over eight
years for financial reporting purposes, and is a Class 8-20% asset for tax purposes.
4.
Tax-exempt interest income of $60,000 was received in 2023.
5.
The tax rate is 30% for all periods.
6.
Taxable income is expected in all future years.
7.
Wildhorse had 100,000 common shares outstanding throughout 2023.
(a)
Your Answer
Correct Answer (Used)
Calculate the amount of capital cost allowance and depreciation expense for 2022 and 2023, and the corresponding carrying
amount and undepreciated capital cost of the depreciable assets at the end of 2022 and 2023.
(b)
Capital Cost
Allowance
Undepreciated
Capital Cost
429,000
1,001,000
200,200
800,800
Determine the amount of current and deferred tax expense for 2023.
Current income tax expense
Deferred tax expense
Depreciation
Expense
178,750
Net Book
Value
1,251,250
178,750
1,072,500
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