Reference no: EM132420626

Problem: A publically accountable, December 31 year-end company, reported the following data in preparing its income tax provision for the year ended December 31, 2018.

• Before tax income from continuing operations: $826,000
• Dividends received from taxable Canadian corporations amounted to $5,500.
• Other Comprehensive Income, not tax affected, arising from portfolio revaluations: $40,000
• Capital gains on the sale of investments in the current year were $22,000.
• Book value and UCC of capital assets at December 31, 2017 was $1,081,000 and $806,000 respectively and resulted in a deferred tax balance of $85,250.
• WRL reported and Asset Retirement Obligation (ARO) of $265,000 at the end of 2017. This balance was increased through associated charges to the income statement in 2018 by interest expense of $13,250 and cost of sales of $18,000 (no related ending inventories). The entire ARO is tax deductible only when paid at the time of actual future environmental restoration.
• Depreciation and CCA of $190,000 and $173,500 were recorded respectively in 2018. There were no additions or disposals.
• WRL paid, on January 1, 2018 a two year insurance premium of $20,000, amortized evenly over the two year period.
• Interest and penalties levied by CRA in an ongoing tax dispute amounted to $2,000
• In 2017, suffered a tax loss resulting in a Deferred Tax balance of $135,000 in recognition of the full loss being reported at December 31, 2017.
• The statutory tax rate for 2018 is 28%. On February 18, 2019, before the 2018 financial statements were approved for release, the statutory rate was increased to 30% for 2019 and the foreseeable number of years.

Prepare, with supporting calculations, the tax provision for White Rock Limited for the year ended December 31, 2018. Round all amounts to the nearest dollar.

Current tax analysis and deferred tax analysis