TAX QUESTION Prior year adjusting entries?
Tax audit in 2011 found that company x paid 200000 on building repair.
On July 31 2010 and booked amount to maintenance expense
CRA has reassessed company for year ended DEC 31 2010
Saying that $ 200,000 is a capital cost of the building and taxes of $ 80,000 are now owing.
These books are open for 2011 and closed for the year 2010.
Can book an entry in 2011 at year end of DEC 31st 2011.
Building has a 40 year life was purchased in 2008
Book entry to correct 2010
Make any amortization entries for 2011 and 2010
Used account income tax payable for tax entry
Income tax rate is 40%
Can any one help me with this question..