Additional Information: 1. Marigold is publicly owned, and uses IFRS. It has an income tax rate of 25%. 2. During the year warranty expense of $51,000 was accrued. $10,200 of this amount was paid in cash during 2017. This is the first year Marigold offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $546,000 on January 1, 2016. These assets are being depreciated on a straight line basis over six years with no residual value. For tax purposes the assets are classified as Class 8, 20%. [The half-year rule was used for 2016.] 4. Marigold pays for life insurance policies for its top executives. During 2017, one of the executives died, and the company received a payment of $96,000 from the life insurance company. 5. On July 1, Marigold was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $24,000. 6. On November 15, $31,000 was received from customer for three months of service, beginning on November 15. One half of this amount was included in revenue for 2017. 7. On December 1, one of the company executives received speeding ticket for $120. The company paid the ticket for the executive, and recorded the cost as an office expense. (a1) Your answer incorrect. Try again. Calculate taxable income and taxes payable for 2017. Taxable Income Taxes Payable 00
Additional Information: 1. Marigold is publicly owned, and uses IFRS. It has an income tax rate of 25%. 2. During the year warranty expense of $51,000 was accrued. $10,200 of this amount was paid in cash during 2017. This is the first year Marigold offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $546,000 on January 1, 2016. These assets are being depreciated on a straight line basis over six years with no residual value. For tax purposes the assets are classified as Class 8, 20%. [The half-year rule was used for 2016.] 4. Marigold pays for life insurance policies for its top executives. During 2017, one of the executives died, and the company received a payment of $96,000 from the life insurance company. 5. On July 1, Marigold was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $24,000. 6. On November 15, $31,000 was received from customer for three months of service, beginning on November 15. One half of this amount was included in revenue for 2017. 7. On December 1, one of the company executives received speeding ticket for $120. The company paid the ticket for the executive, and recorded the cost as an office expense. (a1) Your answer incorrect. Try again. Calculate taxable income and taxes payable for 2017. Taxable Income Taxes Payable 00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Marigold Services has provided the following information for use in determining its income tax obligations related to the year ended December 31, 2017.
Marigold Services
Income Statement
For the Year Ended December 31, 2017
Revenue
Service Revenue
Dividend Revenue Received
Life Insurance Proceeds Received
Total Revenue
Operating Expenses
Office Expenses
Depreciation Expense
Advertising Expense
Meals and Entertainment
Expense
Rent Expense
Litigation Expense
Life Insurance Premiums Paid
Salaries and Wages Expense
Warranty Expense
Total Operating Expense
Incoem From Operations
$854,000
44,000
96,000
22,000
91,000
22,000
17,000
39,000
24,000
7,800
344,000
51,000
$994,000
617,800
$376,200
![Additional Information:
1. Marigold is publicly owned, and uses IFRS. It has an income tax rate of 25%.
2.
3.
During the year warranty expense of $51,000 was accrued. $10,200 of this amount was paid in cash during 2017. This is the first year Marigold offers warranties on services rendered.
Property, plant, and equipment was purchased for $546,000 on January 1, 2016. These assets are being depreciated on a straight line basis over six years with no residual value. For tax purposes the
assets are classified as Class 8, 20%. [The half-year rule was used for 2016.]
4. Marigold pays for life insurance policies for its top executives. During 2017, one of the executives died, and the company received a payment of $96,000 from the life insurance company.
5. On July 1, Marigold was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $24,000.
6. On November 15, $31,000 was received from a customer for three months of service, beginning on November 15. One half of this amount was included in revenue for 2017.
7. On December 1, one of the company executives received a speeding ticket for $120. The company paid the ticket for the executive, and recorded the cost as an office expense.
▼ (a1)
x Your answer is incorrect. Try again.
Calculate taxable income and taxes payable for 2017.
Taxable
Income
Taxes Payable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc673e80e-1969-48dd-9ffe-89da1d7f4c6b%2F4ce05211-089a-4516-963e-2c735c823598%2Fcmltgsj_processed.png&w=3840&q=75)
Transcribed Image Text:Additional Information:
1. Marigold is publicly owned, and uses IFRS. It has an income tax rate of 25%.
2.
3.
During the year warranty expense of $51,000 was accrued. $10,200 of this amount was paid in cash during 2017. This is the first year Marigold offers warranties on services rendered.
Property, plant, and equipment was purchased for $546,000 on January 1, 2016. These assets are being depreciated on a straight line basis over six years with no residual value. For tax purposes the
assets are classified as Class 8, 20%. [The half-year rule was used for 2016.]
4. Marigold pays for life insurance policies for its top executives. During 2017, one of the executives died, and the company received a payment of $96,000 from the life insurance company.
5. On July 1, Marigold was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $24,000.
6. On November 15, $31,000 was received from a customer for three months of service, beginning on November 15. One half of this amount was included in revenue for 2017.
7. On December 1, one of the company executives received a speeding ticket for $120. The company paid the ticket for the executive, and recorded the cost as an office expense.
▼ (a1)
x Your answer is incorrect. Try again.
Calculate taxable income and taxes payable for 2017.
Taxable
Income
Taxes Payable
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