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XYZ Corporation can accelerate the recognition of trade payables as expenses bypaying supplier invoices before...

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Accounting

XYZ Corporation can accelerate the recognition of trade payables as expenses bypaying supplier invoices before the end of the tax year. By doing this, they reducetaxable income for the current year. In this scenario: Normal Payment Schedule: XYZ typically pays supplier invoices within 30 days. Total Trade Payables: $250,000 Taxable Income Calculation:- Total Income: $2,000,000- Total Expenses $1,500,000- Tax rate 21%- Assume that company decide to sell the trade payable (inventory) to its subsidiary with margin 5% of the cost in compare to standard selling price 10%Calculate net income after tax before apply tax acceleration and delay, is thereany differences?

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