Sweet Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the

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Sweet Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the year ended December 31, 2020.

During 2020, Sweet paid $230,000 for meals and entertainment expenses.

In 2017, Sweet’s tax accountant made a mistake when preparing the company’s income tax return. In 2020, Sweet paid $25,000 in penalties related to this error. These penalties were not deductible for tax purposes.

Sweet owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2020, Sweet rented the building to SPK Inc. for two years at $251,000 per year. SPK paid the entire two years’ rent in advance.

Sweet used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $406,000. For tax purposes, Sweet claimed the maximum capital cost allowance of $631,000.

Sweet began to sell its products with a two-year warranty against manufacturing defects in 2020 to match a warranty introduced by its main competitor. In 2020, Sweet accrued $587,000 of warranty expenses: actual expenditures for 2020 were $276,000 with the remaining $311,000 anticipated in 2021.

In 2020, Sweet was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be decreased to 33% for all future years beginning January 1, 2021.

Prepare the journal entries to record current and future income taxes for 2020.