In 2020, Sarasota Ltd., which follows IFRS, reported accounting income of $1,155,000 and the 2020 tax rate
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Question:
In 2020, Sarasota Ltd., which follows IFRS, reported accounting income of $1,155,000 and the 2020 tax rate was 20%. Sarasota had two timing differences for tax purposes:
CCA on the company’s tax return was $487,000. Depreciation expense on the financial statements was $287,500. These amounts relate to assets that were acquired on January 1, 2020, for $1,948,000.
Accrued warranty expense for financial statement purposes was $138,800 (accrued expenses are not deductible for tax purposes). This is the first year Sarasota offers warranties.
Both of these timing differences will fully reverse over the next four years, as follows:
Year | | Depreciation Difference | | Warranty Expense | | Rate |
2021 | | $67,000 | | $20,600 | | 20% |
2022 | | 56,500 | | 28,600 | | 20% |
2023 | | 44,500 | | 40,000 | | 18% |
2024 | | 31,500 | | 49,600 | | 18% |
| | $199,500 | | $138,800 | | |
Calculate income taxes payable for 2020.
Income taxes payable | | $Enter your answer in accordance to the question statement |
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