HB Company Is a Private Company with a Significant Amount

question 20

Essay

HB Company is a private company with a significant amount of long-term debt.The company reports under IFRS.One of the conditions of the debt-financing indenture is that it must provide quarterly financial statements to the lender.HB pays tax at the rate of 20% on the first $200,000 of income and 40% on any income in excess of $200,000.During 20X5,the company earned $500,000 and paid tax at an average rate of 32%.Similar results were expected for 20X6.
HB realized the following actual results for the year ended December 31,20X6 (in thousands):
Required:
Calculate income tax expense (recovery)for each quarter in 20X6 and for the year in total under the:
a.discrete approach
b.integral approach

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually triggers a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any prior learning.

Observational Learning

A form of learning that occurs through observing the behavior of others, often as a model, and the consequences of that behavior.

Vans

A type of vehicle designed for transporting goods or people, characterized by its large boxy shape and ample interior space.