See the below tables that provide information from the financial statements of the Quebec Manufacturing Corporation...

Transcribed Image Text:

See the below tables that provide information from the financial statements of the Quebec Manufacturing Corporation for a four-year period, reflecting the Pre-tax Accounting Income and Historical cost, Accumulated Depreciation and Net Book Value of Capital Assets. In addition, the last table provides the Capital Cost Allowance (CCA) for each year. There were no deferred income tax balances at 1 January 20X1. Quebec Manufacturing Corporation has a tax rate of 40% each year. Note: the only difference in Pre-tax Accounting Income and Taxable Income relates to the temporary timing difference for Capital Assets. Quebec Manufacturing Corporation reports in Canada under IRFS. Required: 1. Calculate the Income tax payable for 20X1, 20X2, 20X3 and 20X4. 2. Calculate the required change each year in the Deferred Tax amount for 20X1, 20X2, 20X3 and 20X4. 3. Prepare the journal entry to record income tax expense in 20X1, 20X2, 20X3 and 20X4. Select from these accounts: Deferred income tax; Income tax expense; Income tax payable Summary Income Statement Revenues Less: Expenses other than Depreciation Depreciation expense Total Expenses Pre-tax Accounting Income Capital Assets* Historical Cost Less: Accumulated depreciation Net Book Value *4-year useful life, no residual value Capital Cost Allowance Capital Assets Final ACCT 735-TEST QUESTIONS BOOKLETb 20X1 114,500 80,900 10,225 91,125 23,375 20X1 40,900 10,225 $30,675 20X1 $16,900 20X2 128,500 92,900 10,225 103,125 25,375 20X2 40,900 20,450 $20,450 20X2 $12,900 20X3 148,500 95,900 10,225 106,125 42,375 20X3 40,900 30,675 $10,225 20X3 $7,100 20X4 168,500 128,900 10,225 139,125 29,375 20X4 40,900 40,900 20X4 $0 $4,000 Page 8 See the below tables that provide information from the financial statements of the Quebec Manufacturing Corporation for a four-year period, reflecting the Pre-tax Accounting Income and Historical cost, Accumulated Depreciation and Net Book Value of Capital Assets. In addition, the last table provides the Capital Cost Allowance (CCA) for each year. There were no deferred income tax balances at 1 January 20X1. Quebec Manufacturing Corporation has a tax rate of 40% each year. Note: the only difference in Pre-tax Accounting Income and Taxable Income relates to the temporary timing difference for Capital Assets. Quebec Manufacturing Corporation reports in Canada under IRFS. Required: 1. Calculate the Income tax payable for 20X1, 20X2, 20X3 and 20X4. 2. Calculate the required change each year in the Deferred Tax amount for 20X1, 20X2, 20X3 and 20X4. 3. Prepare the journal entry to record income tax expense in 20X1, 20X2, 20X3 and 20X4. Select from these accounts: Deferred income tax; Income tax expense; Income tax payable Summary Income Statement Revenues Less: Expenses other than Depreciation Depreciation expense Total Expenses Pre-tax Accounting Income Capital Assets* Historical Cost Less: Accumulated depreciation Net Book Value *4-year useful life, no residual value Capital Cost Allowance Capital Assets Final ACCT 735-TEST QUESTIONS BOOKLETb 20X1 114,500 80,900 10,225 91,125 23,375 20X1 40,900 10,225 $30,675 20X1 $16,900 20X2 128,500 92,900 10,225 103,125 25,375 20X2 40,900 20,450 $20,450 20X2 $12,900 20X3 148,500 95,900 10,225 106,125 42,375 20X3 40,900 30,675 $10,225 20X3 $7,100 20X4 168,500 128,900 10,225 139,125 29,375 20X4 40,900 40,900 20X4 $0 $4,000 Page 8