Wow! This “Scam” pays their Taxes!?! Income Taxes
Income taxes are accounted for in accordance with SFAS No.109, “Accounting for Income Taxes.” A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and for net operating loss carry forwards.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or the entire deferred tax asset will not be fully realizable. Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
The Company expects to see a higher effective tax rate as a result of higher revenues and lower costs throughout the fiscal year. The effective tax rate for the period ended March 31, 2019 was zero percent (0%).
Fair Value of Financial Instruments
Financial instruments consist principally of cash, accounts and related party receivables, trade and related party payables, accrued liabilities and short-term obligations. The carrying amounts of such financial instruments in the accompanying consolidated balance sheets approximate their fair values due to their relatively short-term nature.
The carrying value of the Company’s long-term debt approximates fair value based on current market conditions for similar debt instruments.
Use of Estimates
The preparation of the accompanying financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of the assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting periods. Actual results may differ from those estimates and assumptions.
