2 Mackle Inc., a public company, began operations on January 1, 2021. On December 31, 2021,...

 

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2 Mackle Inc., a public company, began operations on January 1, 2021. On December 31, 2021, the company had the following SFP balances: Equipment, NBV Warranty provision $ 1,440,000 20,000 The following information pertains to the fiscal year ended December 31, 2022: a. Accounting eamings before income taxes was $842,000. b. Dividends received from a taxable Canadian corporation were $75,000. c. Golf club membership fees were $35,000. d. The capital assets had a UCC of $1,350,000 at the end of 2021. Depreciation was $160,000 and CCA was $230,000 in 2022. e. Warranty expense was $115,000 and warranty costs incurred was $90,000. f. The company earned $400,000, which was recorded as a long-term receivable. This amount is taxed when collected. It is expected to be collected in 2024. There were no long-term receivables at the beginning of the year. The 2021 tax rate was 40%. The 2022 tax rate was 45%. Both rates were enacted in the years to which they pertain. Required: 1. Prepare the income tax journal entry for 2022. (14 marks) 2. What is the balance of the deferred tax asset/liability as at December 31, 2022? State whether it is an asset or a liability. (1 mark) 2 Mackle Inc., a public company, began operations on January 1, 2021. On December 31, 2021, the company had the following SFP balances: Equipment, NBV Warranty provision $ 1,440,000 20,000 The following information pertains to the fiscal year ended December 31, 2022: a. Accounting eamings before income taxes was $842,000. b. Dividends received from a taxable Canadian corporation were $75,000. c. Golf club membership fees were $35,000. d. The capital assets had a UCC of $1,350,000 at the end of 2021. Depreciation was $160,000 and CCA was $230,000 in 2022. e. Warranty expense was $115,000 and warranty costs incurred was $90,000. f. The company earned $400,000, which was recorded as a long-term receivable. This amount is taxed when collected. It is expected to be collected in 2024. There were no long-term receivables at the beginning of the year. The 2021 tax rate was 40%. The 2022 tax rate was 45%. Both rates were enacted in the years to which they pertain. Required: 1. Prepare the income tax journal entry for 2022. (14 marks) 2. What is the balance of the deferred tax asset/liability as at December 31, 2022? State whether it is an asset or a liability. (1 mark)

Answer rating: 100% (QA)

SOLUTION To prepare the income tax journal entry for 2022 and determine the balance of the deferred tax assetliability as of December 31 2022 we need ... View the full answer