Refer to E18-6 for Sayaka Tar and Gravel Ltd., and assume the same facts as in E18-6 for the fiscal year ending December 31, 2015, except that the enacted tax rate for 2016 and subsequent years was reduced to 20% on September 15, 2015.
In Exercise 6
2015 2014
Accounts Receivable..........................$ 105,000......$ 320,000
Construction in Process.........................940,000.........500,000
Revenue from Long-Term Contracts.........440,000.........500,000
Construction Expenses..........................410,000.........350,000
Billings on Construction in Process............390,000.........400,000
Equipment.......................................1,100,000......1,100,000
Accumulated Depreciation-Equipment......460,000.........170,000
Undepreciated Capital Cost.....................620,000.........980,000
Instructions
(a) Prepare the journal entry to record the effect of the change in the enacted tax rate.
(b) Calculate any deferred tax balances at December 31, 2015.
(c) Calculate taxable income and income tax payable for 2015.
(d) Prepare the journal entries to record income taxes for 2015.
(e) Prepare a comparative income statement for 2014 and 2015, beginning with the line "Income before income tax" and provide details about the components of income tax expense.
(f) Provide the comparative statement of balance sheet presentation for any resulting deferred tax balance sheet accounts at December 31, 2014, and 2015. Be specific about the classification.
(g) Repeat the statement of financial position presentation in part (e) assuming Sayaka follows IFRS.