The amount for tax contingency under IFRS. Given information: Income before tax is $245,000. Income tax rate is 35%. If tax benefits are $10,000 then probability of sustaining is 30%. If tax benefits are $8,000 then probability of sustaining is 15%. If tax benefits are $6,000 then probability of sustaining is 10%. If tax benefits are $2,000 then probability of sustaining is 45%. Taxes are reported using IFRS methods.

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Answer 1

Question

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

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Answer 2

Question

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

Expert Solution & Answer

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Answer 3

Question

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

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Answer 4

Question

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

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Answer 5

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

Answer 6

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

Answer 7

Chapter 17, Problem 17.23BE

To determine

To calculate: The amount for tax contingency under IFRS.

Given information:

Income before tax is $245,000.

Income tax rate is 35%.

If tax benefits are $10,000 then probability of sustaining is 30%.

If tax benefits are $8,000 then probability of sustaining is 15%.

If tax benefits are $6,000 then probability of sustaining is 10%.

If tax benefits are $2,000 then probability of sustaining is 45%.

Taxes are reported using IFRS methods.

Answer 8

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Answer 10

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Answer 11

Ch. 17 - Prob. 17.1Q Ch. 17 - When will income tax expense and income taxes...Ch. 17 - Will permanent differences cause the effective tax...Ch. 17 - When do permanent differences arise?Ch. 17 - How are deferred tax assets and deferred tax...Ch. 17 - Prob. 17.6Q Ch. 17 - Prob. 17.7Q Ch. 17 - Prob. 17.8Q Ch. 17 - Prob. 17.9Q Ch. 17 - How does a firm determine the need for a valuation...

Solution Summary: The author explains how a contingency tax is calculated using IFRS. The company will realize the tax deductions on the entire amount as opposed to collecting income tax benefits.

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