HB Company Is a Private Company with a Significant Amount $$\begin{array} { c l } \text { Quarter } & { \text { Income (loss) } } \\1 & \$ 100 \\2 & ( 150 ) \\3 & 200 \\4 & 400\end{array}$$

question 15

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):
$$\begin{array} { c l } \text { Quarter } & { \text { Income (loss) } } \\1 & \$ 100 \\2 & ( 150 ) \\3 & 200 \\4 & 400\end{array}$$ Required:
Calculate income tax expense (recovery)for each quarter in 20X6 and for the year in total under the:
a. discreet approach
b. integral approach

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Definitions:

Periodic Supplies

Items or materials that are regularly replaced or replenished over a specified period due to use or expiry.

Reordered

The process of placing a new order for goods or services that were previously ordered or purchased, often to replenish stock or resources.

Inventory Schedule

The planned timing and methodology for counting and evaluating inventory to ensure accurate stock levels.

Medical Office

A facility or space where medical professionals provide outpatient services, including consultations, treatments, and minor procedures.