Reference no: EM133074634
QUESTION DATA - For the year ended December 31, 2020, Brian Co. Reported a $300,000 accounting income before income tax expense and discontinued operations. The company had a loss from a discontinued operation of $60,000 which is fully deductible. The tax rate for 2020 and later is 25%. The company reported the following differences between accounting and taxable income in its current year:
Reported on income statement:
Depreciation expense $50,000
Estimated warranty expense 40,000
Non-taxable dividend income 4,000
Non-deductible fines 6,000
Rent revenue (note 1) 20,000
Reported on tax return:
Capital cost allowance $55,000
Actual warranty costs incurred 43,000
Rent revenue (note 1) -
Note A tenant paid $60,000 on December 10, 2019 for a 3 year rental for the period January 1, 2020 to December 31, 2022. The rent income was taxed when received.
Prepare all appropriate journal entries to record the 2020 current income taxes for Brian Co. Follow the journal entry descriptions to help with the journal entry order. Use drop-down boxes to select account names. If a journal entry is not needed, select N/A in the first row.
What account and amount would Brian Co. report on its balance sheet at December 31, 2020 relating to its current taxes? Use drop-down boxes to select account name.
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