Calculate the amount of any deferred tax asset and/or liability for 2023. Net deferred tax liability $ For the year ended December 31, 2023, Crane Ltd. reported income before income taxes of $180,000. Prior to 2023 taxable income and accounting income was the same each year. In 2023, Crane Ltd. paid $108,000 for advertising: of this amount. $36,000 was expensed in 2023. The remaining $72,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $108,000 was deductible for tax purposes in 2023. The company paid $28,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Crane Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $22.500, of which $18,000 was actual repairs for 2023 and the remaining $4,500 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $37,000 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $100,000. Capital Cost Allowance (CCA) claimed for the year was $128,000. Depreciation and CCA relate to an asset that was purchased on January 1, 2023 for $500,000. Crane was subject to a 25% income tax rate for 2023. Crane follows IFRS.
Calculate the amount of any deferred tax asset and/or liability for 2023. Net deferred tax liability $ For the year ended December 31, 2023, Crane Ltd. reported income before income taxes of $180,000. Prior to 2023 taxable income and accounting income was the same each year. In 2023, Crane Ltd. paid $108,000 for advertising: of this amount. $36,000 was expensed in 2023. The remaining $72,000 was treated as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $108,000 was deductible for tax purposes in 2023. The company paid $28,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes). In 2023 Crane Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $22.500, of which $18,000 was actual repairs for 2023 and the remaining $4,500 was estimated repairs to be completed in 2024. Meal and entertainment expenses totalled $37,000 in 2023, only half of which were deductible for income tax purposes. Depreciation expense for 2023 was $100,000. Capital Cost Allowance (CCA) claimed for the year was $128,000. Depreciation and CCA relate to an asset that was purchased on January 1, 2023 for $500,000. Crane was subject to a 25% income tax rate for 2023. Crane follows IFRS.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Calculate the amount of any deferred tax asset and/or liability for 2023.
Net deferred tax liability
$
Transcribed Image Text:For the year ended December 31, 2023, Crane Ltd. reported income before income taxes of $180,000. Prior to 2023 taxable income
and accounting income was the same each year.
In 2023, Crane Ltd. paid $108,000 for advertising: of this amount. $36,000 was expensed in 2023. The remaining $72,000 was treated
as a prepaid expense for accounting purposes and would be expensed equally over the 2024-2025 period. The full $108,000 was
deductible for tax purposes in 2023.
The company paid $28,000 in 2023 for membership in a local golf club (which was not deductible for tax purposes).
In 2023 Crane Ltd. began offering a 1-year warranty on all merchandise sold. Warranty expenses for 2023 were $22.500, of which
$18,000 was actual repairs for 2023 and the remaining $4,500 was estimated repairs to be completed in 2024.
Meal and entertainment expenses totalled $37,000 in 2023, only half of which were deductible for income tax purposes.
Depreciation expense for 2023 was $100,000. Capital Cost Allowance (CCA) claimed for the year was $128,000. Depreciation and
CCA relate to an asset that was purchased on January 1, 2023 for $500,000.
Crane was subject to a 25% income tax rate for 2023. Crane follows IFRS.
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