On January 1, 2010, Canadian Corporation purchased a new capital asset costing $51,000. The company estimated the
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Required:
a. Calculate the depreciation expense and the CCA for 2010 and 2011, and determine what the net book value of the asset and its undepreciated capital cost will be at the end of each of these years.
b. Calculate the income taxes payable in 2010 and 2011, and determine what the deferred income tax asset or liability balance will be at the end of each of these years. (Hint: You should find that the deferred income tax account will be an asset at the end of 2010 and a liability at the end of 2011.)
c. Explain why the deferred income tax account changes as it does, over this two-year period.
d. Give the journal entry to record the company's income taxes for 2010 and 2011. Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Financial Accounting A User Perspective
ISBN: 978-0470676608
6th Canadian Edition
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry
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