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Coronado Services Ltd. follows ASPE and had earned accounting income before taxes of $521,000 for the year ended December 31, 2023. During 2023, Coronado paid $80,000 for meals and entertainment expenses. In 2020, Coronado's tax accountant made a mistake when preparing the company's income tax return. In 2023, Coronado paid $9,800 in penalties related to this error. These penalties were not deductible for tax purposes. Coronado 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, Coronado rented the building to Trung Inc. for two years at $58, 400 per year. Trung paid the entire two years rent in advance. Coronado used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $304,600. For tax purposes, Coronado claimed the maximum capital cost allowance of $ 453,800. This asset had been purchased at the beginning of. the year for $3,001,300. In 2023, Coronado began selling its products with a two-year warranty against manufacturing defects. In 2023, Coronado accrued $293,600 of warranty expenses: actual expenditures for 2023 were $92,400 with the remaining $201,200 anticipated in 2024. In 2023, Coronado was subject to a 25% income tax rate. During the year, the federal government announced that tax rate would be decreased to 23% for all future years beginning January 1, 2024. (a) Calculate the amount of any permanent differences for 2023. Permanent differences

Coronado Services Ltd. follows ASPE and had earned accounting income before taxes of $521,000 for the year ended December 31, 2023. During 2023, Coronado paid $80,000 for meals and entertainment expenses. In 2020, Coronado's tax accountant made a mistake when preparing the company's income tax return. In 2023, Coronado paid $9,800 in penalties related to this error. These penalties were not deductible for tax purposes. Coronado 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, Coronado rented the building to Trung Inc. for two years at $58, 400 per year. Trung paid the entire two years rent in advance. Coronado used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $304,600. For tax purposes, Coronado claimed the maximum capital cost allowance of $ 453,800. This asset had been purchased at the beginning of. the year for $3,001,300. In 2023, Coronado began selling its products with a two-year warranty against manufacturing defects. In 2023, Coronado accrued $293,600 of warranty expenses: actual expenditures for 2023 were $92,400 with the remaining $201,200 anticipated in 2024. In 2023, Coronado was subject to a 25% income tax rate. During the year, the federal government announced that tax rate would be decreased to 23% for all future years beginning January 1, 2024. (a) Calculate the amount of any permanent differences for 2023. Permanent differences

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Coronado Services Ltd. follows ASPE and had earned accounting income before taxes of $521,000 for the year ended December 31, 2023. During 2023, Coronado paid $80,000 for meals and entertainment expenses. In 2020, Coronado's tax accountant made a mistake when preparing the company's income tax return. In 2023, Coronado paid $9,800 in penalties related to this error. These penalties were not deductible for tax purposes. Coronado 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, Coronado rented the building to Trung Inc. for two years at $58,400 per year. Trung paid the entire two years rent in advance. Coronado used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $304, 600. For tax purposes, Coronado claimed the maximum capital cost allowance of $ 453,800. This asset had been purchased at the beginning of the year for $3,001,300. In 2023, Coronado began selling its products with a two-year warranty against manufacturing defects. In 2023, Coronado accrued $293,600 of warranty expenses: actual expenditures for 2023 were $92,400 with the remaining $201,200 anticipated in 2024. In 2023, Coronado 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) Calculate the amount of any permanent differences for 2023. Permanent differences
Transcribed Image Text:Coronado Services Ltd. follows ASPE and had earned accounting income before taxes of $521,000 for the year ended December 31, 2023. During 2023, Coronado paid $80,000 for meals and entertainment expenses. In 2020, Coronado's tax accountant made a mistake when preparing the company's income tax return. In 2023, Coronado paid $9,800 in penalties related to this error. These penalties were not deductible for tax purposes. Coronado 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, Coronado rented the building to Trung Inc. for two years at $58,400 per year. Trung paid the entire two years rent in advance. Coronado used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $304, 600. For tax purposes, Coronado claimed the maximum capital cost allowance of $ 453,800. This asset had been purchased at the beginning of the year for $3,001,300. In 2023, Coronado began selling its products with a two-year warranty against manufacturing defects. In 2023, Coronado accrued $293,600 of warranty expenses: actual expenditures for 2023 were $92,400 with the remaining $201,200 anticipated in 2024. In 2023, Coronado 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) Calculate the amount of any permanent differences for 2023. Permanent differences
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