Northland Water Inc. has taxable income of $316,000 for the year ended December 31. The companys income
Question:
Northland Water Inc. has taxable income of $316,000 for the year ended December 31. The company’s income tax rate is 25%. Additional information relevant to income taxes includes the following:
■ Capital cost allowance was $80,000 while depreciation expense was $120,000 in the current year. Entering the year, the company had a deferred tax liability on property, plant, and equipment of $50,000 Cr.
■ Dividends from taxable Canadian corporations amounted to $60,000.
■ The company expensed $16,000 on life insurance for its management. This expense is not deductible for tax purposes.
Required:
Prepare the journal entries to record income taxes for Northland Water.
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