Swifty Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the year ended December 31, 2023. During 2023, Swifty paid $231.000 for meals and entertainment expenses. In 2020, Swifty's tax accountant made a mistake when preparing the company's income tax return. In 2023, Swifty paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Swifty 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, Swifty rented the building to SPK Inc. for two years at $252,000 per year. SPK paid the entire two years' rent in advance. Swifty used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $398,000. For tax purposes, Swifty claimed the maximum capital cost allowance of $623,000. Swifty began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Swifty accrued $587,000 of warranty expenses: actual expenditures for 2023 were $283,000 with the remaining $304,000 anticipated in 2024. In 2023 Swift rubinch to a 36% in
Swifty Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the year ended December 31, 2023. During 2023, Swifty paid $231.000 for meals and entertainment expenses. In 2020, Swifty's tax accountant made a mistake when preparing the company's income tax return. In 2023, Swifty paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Swifty 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, Swifty rented the building to SPK Inc. for two years at $252,000 per year. SPK paid the entire two years' rent in advance. Swifty used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $398,000. For tax purposes, Swifty claimed the maximum capital cost allowance of $623,000. Swifty began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Swifty accrued $587,000 of warranty expenses: actual expenditures for 2023 were $283,000 with the remaining $304,000 anticipated in 2024. In 2023 Swift rubinch to a 36% in
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Swifty Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the year ended
December 31, 2023.
During 2023, Swifty paid $231.000 for meals and entertainment expenses.
In 2020, Swifty's tax accountant made a mistake when preparing the company's income tax return. In 2023, Swifty paid $18,000 in
penalties related to this error. These penalties were not deductible for tax purposes.
Swifty 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, Swifty rented the building to SPK Inc for two years at $252,000 per year. SPK paid the entire two years rent in
advance.
Swifty used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $398,000. For tax
purposes, Swifty claimed the maximum capital cost allowance of $623,000.
Swifty began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by
its main competitor. In 2023, Swifty accrued $587,000 of warranty expenses: actual expenditures for 2023 were $283,000 with the
remaining $304,000 anticipated in 2024.
In 2023, Swifty was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be
decreased to 33% for all future years beginning January 1, 2024.
Transcribed Image Text:(a)
Your answer is incorrect.
Calculate the amount of any permanent differences for 2023.
Permanent differences $
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