The following information pertains to Entiguan Sports for the 2006 year-end. Th e treatment of items for accounting and tax purposes is based on fi ctitious accounting and tax standards and is not specifi c to a particular jurisdiction. Calculate the tax base and carrying amount for each item. 1. Donations: Entiguan Sports made donations of €100,000 in the current fi scal year. The donations were expensed for fi nancial reporting purposes, but are not tax deductible based on applicable tax legislation. 2. Interest received in advance: Entiguan Sports received in advance interest of €300,000. The interest is taxed because tax authorities recognize the interest to accrue to the company (part of taxable income) on the date of receipt. 3. Rent received in advance : Entiguan recognized €10 million for rent received in advance from a lessee for an unused warehouse building. Rent received in advance is deferred for accounting purposes but taxed on a cash basis. 4. Loan : Entiguan Sports secured a long-term loan for €550,000 in the current fi scal year. Interest is charged at 13.5 percent per annum and is payable at the end of each fi scal year.

The following information pertains to Entiguan Sports for the 2006 year-end. Th e treatment of items for accounting and tax purposes is based on fi ctitious accounting and tax standards and is not specifi c to a particular jurisdiction. Calculate the tax base and carrying amount for each item. 1. Donations: Entiguan Sports made donations of €100,000 in the current fi scal year. The donations were expensed for fi nancial reporting purposes, but are not tax deductible based on applicable tax legislation. 2. Interest received in advance: Entiguan Sports received in advance interest of €300,000. The interest is taxed because tax authorities recognize the interest to accrue to the company (part of taxable income) on the date of receipt. 3. Rent received in advance : Entiguan recognized €10 million for rent received in advance from a lessee for an unused warehouse building. Rent received in advance is deferred for accounting purposes but taxed on a cash basis. 4. Loan : Entiguan Sports secured a long-term loan for €550,000 in the current fi scal year. Interest is charged at 13.5 percent per annum and is payable at the end of each fi scal year.

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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Se.125.
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Multiple Choice $200,933 $174,983 $208,433 $172,509
ABC Corp. in 2010 made available the following financial information for TY2021: Balance sheet: Asset - 50,000,000 Liability - 30,000,000 Stock Equity - 20,000,000 Income statement: Gross sales - 100,000,000 Cost of sales - 60,000,000 Operating Expense - 50,000,000 How much is the income tax payable under CREATE Law if the taxpayer is a domestic corporation?
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