Adelphi Corp. in its first year of operations has the following differences between its carrying amounts and the tax bases of its assets and liabilities at the end of 2023.

It is estimated that the warranty liability will be settled in 2024. The difference in equipment (net) will result in future taxable amounts of $20,000 in 2024, $30,000 in 2025, and $10,000 in 2026. The company has taxable income of $520,000 in 2023. As of the beginning of 2023, the enacted tax rate is 30% for 2023 to 2025 and 25% for 2026. Adelphi expects to report taxable income through 2026.

Instructionsa. Prepare the journal entry to report current and deferred tax expense.

b. Indicate how deferred taxes would be reported on the statement of financial position at the end of 2023 under IFRS.

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Equipment (net) Estimated Warranty Liabilities Carrying Amount 400,000 200,000 Tax Basis 340,000 0