Assignment $6$ Chp $18$ Part A$.18$ marks

Due Tuesday March $5,2024$

Please upload your WORD or Excel file to Canvas $($under Assignments$).$ Label file: Last name, first name Assignment $6($ex: Wyntjes Barbara Assignment $6)$

BMW Consulting, a public company, accounting income before income tax of $$202,000$ in Year $4.$ Included in this amount, BMW included dividend income from a taxable Canadian corporation for $$4,500,$ equity income of $$2,500$ and depreciation expense of $$3,000.$

BMW reported the following items on its balance sheet at December $31,$ Year $4$:

Prepaid rent

Installment accounts receivable

NBV of capital assets

$$5,000$

$$25,000$

$$40,000$

For tax purposes, the UCC balance at December $31,$ Year $3$ for capital assets was $$35,000$ and the CCA for Year $4$ was $$5,000.$ The tax rate was $30\%$ for the past two years. During Year $4,$ Canadian parliament enacted into law a bill raising the tax rate for Year $5$ and future years to $35\%.$

Required: show all calculations and work for full marks.

a$.$ Calculate income tax payable for Year $4$

b$.$ Prepare the journal entries for Year $4$ and show all calculations. For each temporary difference, indicate whether the amount is an asset or liability.

c$.$ Prepare a partial income statement and balance sheet for BMW indicating the balances of all income tax$-$related accounts.

d$.$ If BMW was a private company and used the taxes payable method, prepare the journal entry to record income tax expense for Year $4.$