Toast Corporation is a publicly accountable entity whose year end is December 31. The deferred income tax liability account as at December 31, 20x0 was based on two temporary differences:
-       Net book value of PPE of $5,500,000 versus their UCC of $4,800,000 -       A warranty liability of $210,000
Additional information for the year 20x1 is as follows:
Net income before taxes	$2,400,000
Depreciation expense	745,000
CCA	620,000
Warranty expense	185,000
Warranty costs incurred	220,000
Meals and entertainment	20,000
Club dues which are non-deductible	12,000
Dividends received from taxable Canadian Corporations which are      non-taxable	45,000
Expenses included in the calculation of the net income before      taxes but which will only be deductible in 20x3	21,600
During 20x1, Toast sold equipment with an original cost of $600,000 for proceeds of $450,000. The net book value of the machinery on the date of sale was $375,000. There were no additions to PPE during the year. The legislated tax rate for 20x1 is 28%, which is lower than the 20x0 tax rate of 29%. At the end of 20x1, the government legislated that the tax rates for 20x2 through 20x4 would be 30%.
Required -
Calculate the current and deferred portion of income tax expense.

(Follow Canadian rules)

Answer rating: 100% (QA)

2400000 x 28 672000 Current tax expense 24000... View the full answer