The company Darling, had accounting income of 278,000 that included the following adjustments: 1. Tax provision: Current
Question:
The company Darling, had accounting income of 278,000 that included the following adjustments:
1. Tax provision:
Current 48,275
Future 27,500
2. Company recorded amortization of 20,000
3. The actual CCA for the year 18,000
4. Company donated to charity 2800
5. The company spent for marketing U.S publications targeting the Canadian market 5000
6. Bank loan was used to purchase common shares of a CCPC company that gave dividends 6000
7. The company incurred tax and accounting fees to dispute tax 500
8. The company paid life insurance premium to one of the executives of Darling, this was not required as a collateral 10,000
9. Company spent for landscaping, this amount was deducted as an expense 500
10. Company recorded bonus expense to be paid out in Feb 20, 2016. The bonus was declared in Dec 30, 2015.
11. Company deducted golf club membership for accounting purposes 1000
12. Company issued treasury shares of $2000 500
13. Estimated warranty of $20,000, actual amount for the year was $15,000
Required:
Determine net income for tax purposes. Indicate why you omit the items in your calculations. IGNORE GST/PST.
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta