Author Question: What would be most likely to occur in the year when companies have to depreciate equipment ... (Read 77 times)

Dannyrod2 · **on:** Aug 7, 2023

Question 1

What is the tax liability for a small Canadian-controlled private corporation (CCPC) located in British Columbia having earnings before taxes (EBT) of $590,000? The relevant combined federal and provincial corporate income tax rate is 13% for taxable income up to $500,000 and 27% for the amount exceeding $500,000.

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$89,300

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$90,700

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$91,250

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$92,060

Question 2

What would be most likely to occur in the year when companies have to depreciate equipment overshorterlives? Assume for this question that sales, other operating costs, and tax rates are not affected, and the same depreciation method is used for tax and shareholder reporting purposes.

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Companies’ NOPAT would increase.

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Companies’ cash positions would increase.

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Companies’ cash flows would decrease.

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Companies’ reported net income would increase.

jacquelyngibson · **Reply #1 on:** Aug 7, 2023

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