Reference no: EM132843860

Concord Limited had investments in securities on its statement of financial position for the first time at the end of its fiscal year ended December 31, 2020. Concord reports under IFRS and its investments in securities are to be accounted for at fair value through net income. During 2020, realized losses and gains on the trading of shares and bonds resulted in investment income, which is fully taxable in the year. Concord also accrued unrealized gains on December 31, 2020, which are not taxable until the investment securities are sold. The portfolio of trading securities had an original cost of $315,950 and a fair value on December 31, 2020, of $319,950.

The entry recorded by Concord on December 31, 2020, was as follows:

FV-NI Investments 4,000

Investment Income or Loss 4,000

• Following the year ended December 31, 2020, Concord continued to actively trade its securities investments until the end of its 2021 fiscal year, when it was forced to sell several of them at a loss, because of the need for cash for operations. By December 31, 2021, the portfolio of investments contained a single investment in shares, which was purchased in November 2021. Concord Limited had paid $50,300 for these remaining shares. At December 31, 2021, the shares' market value was $47,600. Income before income tax for Concord was $125,500 for the year ended December 31, 2021. There are no other permanent or reversing/timing differences in arriving at the taxable income for Concord Limited for the fiscal year ended December 31, 2021. The enacted tax rate for 2021 and future years is 30%.

Problem 1: Prepare the necessary journal entry for Concord Limited to accrue the unrealized loss on its securities investments.

Problem 2: Calculate the deferred tax balance at December 31, 2021.

Problem 3: Calculate the current tax expense for the year ended December 31, 2021.