Jaunty Ltd. began operations on January 1, 2020. Jaunty purchased equipment on January 1, valued at $430,000. On December 31, 2020, Jaunty reported income before taxes of $60,000. Included in income before taxes are the following items:

• Meals of $7,000
• Dividend income of $1,800 from another Canadian corporation
• Warranty expenses of $8,000
• Penalties on late payment of taxes of $750
• Depreciation of $23,000

For tax purposes, Jaunty is able to claim $38,000 of CCA on its equipment for the year. After reviewing its accounts, Jaunty determined that it paid $3,000 in warranty costs for the year.

Jaunty’s tax rate for 2020 is 28%.

Required:

1. Calculate Jaunty’s taxable income for 2020.
2. Prepare the journal entry to recognize the current taxes for 2020.
3. Assuming that Jaunty follows IFRS, determine the amount of deferred taxes for 2020 and prepare the necessary adjusting journal entry.