The Following Information Relates to a Building Owned by a Company

question 37

Essay

The following information relates to a building owned by a company. $$\begin{array} { l r } \text { Cost of the building } & \$ 2,500,000 \\\text { Net book value } & \$ 1,700,000 \\\text { CCA deducted to date } & \$ 1,525,000 \\\text { Tax rate } & 40 \%\end{array}$$ A) Calculate the balance in the future income tax account.
B) Indicate where on the financial statement the account would be found.C) Explain when this amount is due to be received or paid by the company.

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Definitions:

Transitive Preferences

In decision-making, the condition where if an individual prefers option A to option B and option B to option C, then they also prefer option A to option C.

Majority Rule

A decision-making rule in which the preferences of more than half of the members in a group have authority over decisions.

Transitivity Property

is a mathematical concept applied in various fields, indicating that if relation A is related to B, and B is related to C, then A is necessarily related to C.

Adverse Selection

A scenario where information asymmetry results in high-risk individuals being more likely to engage in agreements, negatively affecting the other party.