JD Corporation has income before tax of $800000. Included in this amount are meals and entertainment amounting to $9000, warranty costs of $100000 ($65000) in warranty claims), depreciation $94000 and dividends from a taxable Canadian Corporation of $15000. CCA for the year amounted to $90000 and then the tax rate is 40%. Calculate Income Tax Expense
JD Corporation Canada | |||
Particulars | Amount | ||
Income Before tax | 800000 | ||
+ | Meal & entertainment | 9000 | |
- | Meal & entertainment(Only 50% allowed as deduction ) | 4500 | |
+ | Warrant cost | 100000 | |
- | Warrant cost(Actual Incurred is deductable) | 65000 | |
+ | Depreciation(Allowed as per Accounting) | 94000 | |
- | Capital Cost Allowance(CCA)(Allowed as per income tax) | 90000 | |
- | Dividend(Income Taxed on gross up basis with dividend tax credit) | 15000 | |
828500 | |||
Incoe tax rate@40% | 331400 | ||
Net Profit | 497100 |
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