Total tax expense and recovery

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In its first two years of operations, ending in 2020, Odoi Inc paid taxes of $5,700on taxable income of $30,000. The tax rate for 2021 is 20%.Odoi Inc's loss before taxes for 2021 is $152,000. Odoi Inc's expenses included$710,000 of depreciation expense, and meals and entertainment costs of $18,000(they are one-half deductible for tax purposes).At the beginning of the year, Odoi Inc had a future tax liability of $24,700 based on$130,000 of temporary differences related to its fixed assets.Odoi Inc will claim $660,000 of CCA in 2021. Management anticipates using all ofthe loss carryforwards within the allowable carryforward period.Odoi Inc has a calendar year end.Required:a) Calculate Odoi Inc's taxable income/loss for 2021.b) Prepare the journal entries to record income taxes for 2021.c) Calculate Odoi Inc's 2021 total tax expense/recovery. What is their effective taxrate for 2021?

Reference no: EM133290911

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