Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2020, OHU Ltd., which follows IFRS, reported accounting income of $300,000 and the 2020 tax rate was 18%. OHU had two timing differences

In 2020, OHU Ltd., which follows IFRS, reported accounting income of $300,000 and the 2020 tax rate was 18%. OHU had two timing differences for tax purposes: CCA on the company's tax return was $320,000. Depreciation expense on the financial statements was $200,000. Accrued warranty expense for financial statement purposes was $80,000 (accrued expenses are not deductible for tax purposes). This is the first year OHU offers warranties. Both of these timing differences will fully reverse over the next four years, as follows: Depreciation Warranty Year Difference Expense Rate 2021 $40,000 $10,000 17% 2022 35,000 15,000 17% 2023 25,000 25,000 15% 2024 20,000 30,000 15% $120,000 $80,000 Calculate income taxes payable for 2020. $ Income taxes payable, 2020

Step by Step Solution

3.40 Rating (156 Votes )

There are 3 Steps involved in it

Step: 1

Answer Solution Calculation of Income tax payable of OHU Ltd ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

12th Canadian Edition

1119497043, 978-1119497042

More Books

Students also viewed these Accounting questions