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Prepaid rent of $200,000 was paid for a new warehouse that

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Mr Tom White, the president of White Crane Importing Ltd (WCIL), informed you that his firm has an accounting profit before tax (PBT) of $800,000, the corporate tax rate is 25.0 percent, and (during the tax year) WCIL experienced and journalised the following items:

i. The WCIL sales people spent $35,000 entertaining customers.

ii. WCIL won $60,000 in a lottery.

iii. Goodwill was found to be impaired and was written down by $45,000.

iv. Prepaid rent of $200,000 was paid for a new warehouse that will be used in the following tax year.


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