QUESTION 1 Formula 40055 Corp. (Formula) was doing a review of its statements and reported the following differences between SFP carrying amounts and tax bases at December 31, 2024: Carrving Amount Tax Base Depreciable assets $100,000 $67,500 Warranty liability (current liability) 20,500 0- Pension liability (long-term liability) 38,800 -0- The differences between the carrying amounts and tax bases were expected to reverse as follows: 2025 2026 After 2026 Depreciable assets $17,500 412,500 $2,500 Warranty liability (current liability) 20,500 -0 -0- Pension liability (long-term liability) 12,000 12,000 14,800 Tax rates enacted at December 31, 2024, were 31% for 2024, 30% for 2025, 25% for 2026, and 28% for 2027 and later years. During 2025, Sarah made four quarterly tax instalment payments of $9.500 each and reported income before income tax on its income statement of $119,650. Included in this amount were dividends from taxable Canadian corporations of $5,800 (non-taxable income) and $25,000 of expenses related to the executive team''s golf dues (non-tax- deductible expenses). There were no changes to the enacted tax rates during the year. As expected, book depreciation in 2025 exceeded the capital cost allowance claimed for tax purposes by $17,500, and there were no additions or dispesals of property, plant, and equipment during the year. A review of the 2025 activity in the Warranty Liability account in the ledger indicated the following: Balance, Dec. 31, 2024 $20,500 Payments on 2024 product warranties (21,200) Payments on 2025 product warranties (6,300) 2025 warranty accrual 30,480 Balance, Dec. 31, 2025 $23.480 All warranties are valid for one year only. The Pension Liability account reported the following activity: Balance, Dec. 31, 2024 $38,800 Payment to pension trustee (72,000} 2025 pension expense 60,000 Balance, Dec. 31, 2025 $26,800 Pension expenses are deductible for tax purposes, but only as they are paid to the trustee, not as they are accrued for financial reporting purposes. Sarah reports under IFRS. Instructions a. Calculate the Deferred Tax Asset or Deferred Tax Liability account at December 31, 2024, and explain how it should be reported on the December 31, 2024 SFP. b. Calculate the Deferred Tax Asset or Deferred Tax Liability account at December 31, 2025, Prepare all income tax entries for Zach for 2025. d. Identify the balances of all income tax accounts at December 31, 2025, and show how they will be reported on the comparative statements of financial position at December 31, 2025, and 2024, and on the income statement for the year ended December 31, 2025. e. How would your responses to parts a) and (d) change if Formula followed the ASPE future income taxes method? n