Chapter 4 Problems

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ACCT 3350
Oct 17, 2023
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Chapter 4 Problems Exercise 12: question within excel file Calculate income for taxable purposes Question to ask yourself: Is this deduction on the accounting side ALSO taken on tax (for example: deprecation is deductible on accounting income but is not on tax that's why you add it back) F/S TAX expense is an estimate that why it is added back NI after tax per F/S 150,000 ADD: items that were deduced for accounting purposes but are not deductible for tax purposes Income tax deduced (provision for income taxes) Current 25,000 Future 130,000 Amortization Expense 40,000 Prior Reserve for (Doubtful Accounts) 10,000 Non-Deductible Interest paid on late income taxes 2,500 Bond Amortization Expense 7,500 DEDUCTION: items that were not deducted for accounting but we can deduct for tax: CCA (deduction) this question ignores CCA Current year Reserve (15,000) Landscaping Costs (12.000) Income for Tax Purposes 338,000 *Landscaping costs is deducted because it was a capital costs, Income tax act permits landscaping costs as a deduction*
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