Ditek Corp. provides a defined contribution pension plan for its employees. Under the plan, the company is required to contribute 3% of employees’ gross pay to a fund trustee each year. Ditek’s total payroll for 2011 was $2,732,864 and the company made all required payments within the year. Prepare a summary journal entry to record Ditek’s pension expense for the year.
Pension
Expense........................... 81,986
Cash.................................. 81,986
($2,732,864 X 3% =
$81,986)
Different countries have different statutory tax rates. Choose an industry and select five companies that operate in different countries. Access these companies’ most recent financial statements and make note of their statutory and effective income tax rates.
Alternatively, use the railway industry and the following companies:
Alternatively, use the railway industry and the following companies:
Canadian National Railway:
…………….……………………… Canada
Deutsche Bahn:
………………………….……………………… Germany
East Japan Railway:
……………………..……………………… Japan
NSB Group:
……………………………………………………… Norway
National Railroad Passenger
Corporation (Amtrak): ……………. United States
Instructions
Access the most recent
reports for the five companies you chose. For each company, identify its year
end, country of operation, statutory income tax rates, and effective tax rates.
Discuss any similarities or differences found.
Below, is the schedule of
information on statutory and effective income tax rates for five companies
operating in the railroad industry, but in different countries.
|
Country |
Year end |
Statutory income tax
rate |
Effective income tax
rate |
Deutsche
Bahn |
Germany |
Dec 2009 |
30.5% |
26.9% |
East Japan Railway
|
Japan |
Mar 2009 |
41.8% |
41.8% |
NSB Group |
Norway |
Dec 2009 |
28% |
37% |
Canadian National
Railway |
Canada |
Dec 2008 |
31% |
25.5% |
National Railway Passenger
(Amtrak) |
United
States |
Sept 2009 |
35% |
0% |
From the above, most
countries in the list have a similar statutory rate of 30 – 35%, except Japan
that has a rate of 41%, significantly higher than the others. The effective
rate was most different from National Railway which decreased to 0% due to
valuation allowance and substantial losses from current operations for the
company.
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