Change in Tax Rates: On 1 January 20X3, Highmark Corporation reported the following amounts on the statement

Question:

Change in Tax Rates: On 1 January 20X3, Highmark Corporation reported the following amounts on the statement of financial position:

On this date, the net book value of capital assets was $\$ 1,750,000$ and undepreciated capital cost was $\$ 1,450,000$. There was a warranty liability of $\$ 40,000$. Taxable income of $\$ 500,000$ (in total) in $20 \mathrm{X} 1$ and $20 \mathrm{X} 2$ had resulted in the payment of $\$ 195,000$ of income tax.

In $20 \mathrm{X} 3$, accounting income was $\$ 170,000$. This included non-tax-deductible expenses of $\$ 42,000$, dividend revenue (non-taxable) of $\$ 12,000$, depreciation of $\$ 75,000$, and a warranty expense of $\$ 39,000$. Warranty claims paid were $\$ 51,000$ and CCA was $\$ 99,000$.

Required:

Provide the journal entry to record tax expense in $20 \times 3$. The enacted tax rate was $41 \%$ in $20 \times 3$.

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