Question

Jordan Corporation reports under IFRS. The following information applies to Jordan Corporation.
1. Prior to 2010, taxable income and accounting income were identical.
2. Accounting income was $1.7 million in 2010 and $1.4 million in 2011.
3. On January 1, 2010, equipment costing $1 million was purchased. It is being depreciated on a straight-line basis over eight years for financial reporting purposes, and is a Class 8-20% asset for tax purposes.
4. Tax-exempt interest income of $60,000 was received in 2011.
5. The tax rate is 35% for all periods.
6. Taxable income is expected in all future years.
7. Jordan Corporation had 100,000 common shares outstanding throughout 2011.
Instructions
(a) Calculate the amount of capital cost allowance and depreciation expense for 2008 and 2011, and the corresponding carrying amount and undepreciated capital cost of the depreciable assets at the end of 2010 and 2011.
(b) Determine the amount of current and future income tax expense for 2011.
(c) Prepare the journal entry(ies) to record 2011 income taxes.
(d) Prepare the bottom portion of Jordan's 2011 income statement, beginning with the line "Income before income taxes." (e) Indicate how future income taxes should be presented on the December 31, 2011 balance sheet.
(f) How would your responses to (d) and (e) change if Jordan Corporation followed the PE GAAP future income taxes method?


$1.99
Sales1
Views33
Comments0
  • CreatedAugust 23, 2015
  • Files Included
Post your question
5000