Reference no: EM132820011
Culver Inc. reports accounting income of $111,000 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.
1. Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $14,6
2. Rent revenue reported on the tax return is $21,900 higher than rent revenue reported on the income statement.
3. Non-deductible fines appear as an expense of $13,200 on the income statement.
4. Culver's tax rate is 30% for all years and the company expects to report taxable income in all future years. Culver reports under IFRS.
Problem 1: Calculate taxable income and income tax payable for 2020.
Problem 2: Calculate any deferred tax balances at December 31, 2020.
Problem 3: Prepare the journal entries to record income taxes for 2020.
Problem 4: Reconcile the statutory and effective rates of income tax for 2020. (Round percentages to 1 decimal place, e.g. 25.7%.)
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