4) No More Powell Ltd. (NMP) reported the following pre-tax income for each of the following...

 

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4) No More Powell Ltd. (NMP) reported the following pre-tax income for each of the following years: Statement of Earnings for the year 2021 2020 2019 Revenues Expenses (including depreciation) Net income before tax 185,000 194,000 177,000 130,000 135,000 125,000 55,000 59,000 52,000 The company has a tax rate of 30%. NMP recorded $20,000 of depreciation each year on their statement of earnings. For tax purposes the company uses capital cost allowance (CCA) and computes the following amounts of CCA for each of the following years: 2021 - $13,000 2020 - $22,000 2019-$35,000 Required (21 marks): a) For each year (2021, 2020 and 2019) determine the amount of income taxes payable, income tax expense, and deferred income tax. Show these amounts as a journal entry that NMP would record each year. b) Clearly state whether the deferred income tax is an asset or liability for each year. 4) No More Powell Ltd. (NMP) reported the following pre-tax income for each of the following years: Statement of Earnings for the year 2021 2020 2019 Revenues Expenses (including depreciation) Net income before tax 185,000 194,000 177,000 130,000 135,000 125,000 55,000 59,000 52,000 The company has a tax rate of 30%. NMP recorded $20,000 of depreciation each year on their statement of earnings. For tax purposes the company uses capital cost allowance (CCA) and computes the following amounts of CCA for each of the following years: 2021 - $13,000 2020 - $22,000 2019-$35,000 Required (21 marks): a) For each year (2021, 2020 and 2019) determine the amount of income taxes payable, income tax expense, and deferred income tax. Show these amounts as a journal entry that NMP would record each year. b) Clearly state whether the deferred income tax is an asset or liability for each year.

Answer rating: 100% (QA)

ANSwer A Revenue B Expenses CCA D tatable F tax payable CD 3012 A 2021 Met Income before tak 55000 B ... View the full answer