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Using the information from_ Nilson Inc. had accounting income of $156,000 in 2017. Included in the...

Using the information from_

Nilson Inc. had accounting income of $156,000 in 2017. Included in the calculation of that amount is the CEO's life insurance expense of $5,000, which is not deductible for tax purposes. In addition, the undepreciated capital cost (UCC) for tax purposes is $14,000 lower than the net carrying amount of the property, plant, and equipment, although the amounts were equal at the beginning of the year. Prepare Nilson's journal entry to record 2017 taxes, assuming IFRS and a tax rate of 25%.

_calculate the effective rate of income tax for Nilson Inc. for 2017. Also make a reconciliation from the statutory rate to the effective rate, using percentages.

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Expert Solution

Particulars $
Tax expenses @ 25% on $156,000                                        39,000
Accouting income 156,000
Add: Life insurance expenses                                          5,000
Less: Undepreciated capital cost                                        14,000
Earning before tax expenses 147,000
Less;Tax expenses                                           39,000
Earning after taxes                                     108,000
Effective tax rate = Tax expenses divide by
                                                                      -   Earnings before tax
EFTR 26.53%

ekkarill92 answered 1 year ago
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