Quality Cabinets Inc. (Quality) manufactures custom kitchen cabinets from its location in Squamish, British Columbia. The cabinets
Question:
Quality Cabinets Inc. (Quality) manufactures custom kitchen cabinets from its location in Squamish, British Columbia. The cabinets are then sold to contractors who install them in kitchens. Bruce MacDonald is the owner and has approached you, a CPA with a local CPA firm, to advise on some accounting issues that arose during the year and to help prepare the corporate tax returns, including the associated accounting entries.
It is January 31, 2024.
Task #1 Bruce has asked for an analysis of the accounting issues described in Appendix I. Quality reports its financial statements in accordance with ASPE.
Task #2 Bruce also requires a calculation of taxable income for the most recent year ended December 31, 2023. He has also requested that you prepare the year-end journal entry for taxes payable using a marginal rate of 14% on income less than the business limit. Bruce has provided you with the draft statement of income and retained earnings (Appendix II) and additional information you will need (Appendix III).