A Show the taxable income/loss for each year and prepare income tax journal entries for 2018, 2019,
Question:
A Show the taxable income/loss for each year and prepare income tax journal entries for 2018, 2019, 2020 and 2021.
Prepare the income statement for 2021, beginning with the line “Income before income tax.”
Select financial information for Taron Incorporated (“TI”), a Canadian corporation, is as follows:
2018 | 2019 | 2020 | 2021 | ||
Income before tax | $ 144,000 | $ 216,000 | $ (480,000) | $ 185,000 | |
Depreciation Expense | 192,000 | 192,000 | 192,000 | 192,000 | |
CCA claimed | 192,000 | 384,000 | 192,000 | 48,000 | |
Tax rate applicable | 35% | 38% | 38% | 38% | |
Other information:
TI began operations in 2018 and has a December 31 year end
The original cost of fixed assets purchased was $960,000 and no additional fixed assets have been purchased since the company began operations.
In 2018, the company pay non-deductible fines of $26,000.
In 2020, management decided it would carry back the losses to 2018 and 2019, and would carry any remainder forward; management has determined that it is more likely than not that any unused loss carry-forwards will be utilized in the future.
Expert Answer:
