ABC Inc has just completed its 2021 taxation year ending December 31, 2021 Using ASPE, the accountant has determined that the Company has experienced a business loss of $120,000 before income taxes The accountant provides the following information that was used in the determination of the net accounting loss Instructions For each question , provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income Loss for Tax Purposes ABC Inc has just completed its 2021 taxation year ending December 31, 2021 Using ASPE, the accountant has determined that the Company has experienced a business loss of $120,000 before income taxes The accountant provides the following information that was used in the determination of the net accounting loss Instructions For each question , provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income Loss for Tax Purposes ABC Inc has just completed its 2021 taxation year ending December 31, 2021 Using ASPE, the accountant has determined that the Company has experienced a business loss of $120,000 before income taxes The accountant provides the following information that was used in the determination of the net accounting loss Instructions For each question , provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income Loss for Tax Purposes q1 Future Income Tax Expense in the amount of $8,800 was deducted to arrive at Net Loss for Accounting Purposes 1 points QUESTION 2 The Company has a Class 8 balance of $9,000 at the beginning of 2021 relating to their office furniture The Company disposed of all remaining assets in Class 8 during the renovation of the office building The capital cost of these assets was $15,400 and the proceeds of disposition amounted to $5,500 The company has chosen to lease office furniture going forward so no additional Class 8 assets were purchased in the year Ignore any accounting loss that would have resulted from this transaction 2 points QUESTION 3 The Company has a Class 10 1 UCC balance of $18,200 at the beginning of the year This balance relates to a passenger vehicle that was purchased for an executive several years ago at a price of $39,000 The vehicle was sold during the year for $12,800 Ignore any accounting loss that would result from this transaction 2 points QUESTION 4 The company deducted Bad Debt Expense in the amount of $6,300 on their Income Statement This amount was the total of actual bad debt write offs for the year They did not set up an Allowance for Doubtful Accounts for accounting purposes For tax purposes, the Company deducted a reserve of $3,000 for the taxation year ending December 31, 2020 A reasonable estimate of doubtful debts for the year ending December 31, 2021 is $5,700 3 points its complete

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jul 27, 2024

ABC Inc. has just completed its 2021 taxation year ending December 31, 2021. Using ASPE, the accountant has determined that the Company has experienced a

ABC Inc. has just completed its 2021 taxation year ending December 31, 2021. Using ASPE, the accountant has determined that the Company has experienced a business loss of $120,000 before income taxes. The accountant provides the following information that was used in the determination of the net accounting loss:

Instructions:

For each "question", provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income/Loss for Tax Purposes.

Instructions:

For each "question", provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income/Loss for Tax Purposes.

Instructions:

For each "question", provide the effect on the reconciliation of Net Loss for Accounting Purposes to minimum Net Business Income/Loss for Tax Purposes.

Future Income Tax Expense in the amount of $8,800 was deducted to arrive at Net Loss for Accounting Purposes.

1 points

QUESTION 2

The Company has a Class 8 balance of $9,000 at the beginning of 2021 relating to their office furniture. The Company disposed of all remaining assets in Class 8 during the renovation of the office building. The capital cost of these assets was $15,400 and the proceeds of disposition amounted to $5,500. The company has chosen to lease office furniture going forward so no additional Class 8 assets were purchased in the year.

Ignore any accounting loss that would have resulted from this transaction.

2 points

QUESTION 3

The Company has a Class 10.1 UCC balance of $18,200 at the beginning of the year. This balance relates to a passenger vehicle that was purchased for an executive several years ago at a price of $39,000. The vehicle was sold during the year for $12,800. Ignore any accounting loss that would result from this transaction.

2 points

QUESTION 4

The company deducted Bad Debt Expense in the amount of $6,300 on their Income Statement. This amount was the total of actual bad debt write-offs for the year. They did not set up an Allowance for Doubtful Accounts for accounting purposes. For tax purposes, the Company deducted a reserve of $3,000 for the taxation year ending December 31, 2020. A reasonable estimate of doubtful debts for the year ending December 31, 2021 is $5,700.

3 points

its complete