[47] For calendar 2020, Melvin Corp. reported depreciation expense of $ 800,000 on its income statement, but on its 2020 income tax return, Melvin claimed CCA of $ 1,200,000. The 2020 income statement also included $ 150,000 in warranty expenses that will be deducted for tax purposes when it will be paid. Melvin's income tax rates are 30% for 2020, 2021 and 2022, and 24% for 2023 and all tax rates are known in advance in 2019. The depreciation difference and warranty expense will reverse over the next three years as follows: Depreciation Difference Warranty Expense 2021 $280,000 $ 30,000 2022 (30,000) 50,000 2023 150,000 70,000 $400,000 $150,000 These were Melvin's only reversible differences. At December 31, 2020, Melvin's deferred tax balance should be O a. $70,200 Liability. O b. $70,200 Asset. O c. $90,000 Liability. Od $79,200 Liability. e. $88,200 Liability. [48] Before considering a tax loss carryforward of $80 million, Fama Corporation reported $200 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 40%. On January 1 of the current year a new tax law was enacted, reducing the rate to 30% effective immediately. Fama's income tax payable for the current year would be: O a. $28 million. O b. $48 million. O c. $80 million. Od $60 million. O e. $36 million. [49] Kookie Corporation, Inc., partial income statement for its first year of operations is as follows: Income before income taxes $1,750,000 Income tax expense: Current $ 483,000 Deferred 42,000 (525,000) Net income _$1,225,000 Kookie uses straight-line depreciation for financial reporting purposes and CCA for tax purposes. The depreciation expense for the year was $ 700,000. Except for depreciation, there were no other differences between accounting income and taxable income. Assume a 30% tax rate for the year. What amount was claimed for CCA on the corporation's tax return for the year? [50] Katchup, Inc., reported a taxable and accounting loss of $ 130,000 for 2020. Its pre-tax accounting income and taxable income for the previous two years were as follows: 2018 $ 60,000 2019 $ 80,000 Assume Katchup uses the carryback provisions. The tax rates for the three years were 25% for 2018, 35% for 2019 and 30% for 2020. The amount that it reports as a net loss for financial reporting purposes in 2020, would be a. $0. O b. $90,500 O c. $91,000. O d. $130,000. e. none of the above. [51] Bare Fashions Corp. reported pre-tax accounting income of $ 300,000 for calendar 2020. To calculate the income tax liability, the following data were considered: $20,000 CCA in excess of depreciation Instalment tax payments made during 2020 Enacted income tax rate for 2020 25,000 30% What amount should Bare Fashion report as its current income tax liability income tax payable) on its December 31, 2020 Statement of Financial Position? O a. $84,000. O b. $6,000. O c. $51,000. O d. $59,000. O e. $65,000 [52] Hopper Corporation reported the following results for its first three years of operations: 2019 Income (before income taxes) $ 40,000 2020 Loss (before income taxes) (360,000) 2021 Income (before income taxes) 400,000 There were no permanent or reversible differences during these three years. Assume an income tax rate of 30% for 2019 and 2020, and 40% for 2021, and that any tax loss carryforward recognized is more likely than not to be realized. If Hopper elects to use both the carryback and the carryforward provisions, what after tax net income (loss) is reported for 2020? O a. $(360,000). Ob. $0. O c. $(348,000). O d. $(220,000). O e. None of the above. [53] At the end of 2020, its first year of operations, Ontario Corp. prepared the following reconciliation between pre-tax accounting income and taxable income: Pre-tax accounting income $ 300,000 Estimated lawsuit expense 750,000 Instalment sales profit (600,000) Taxable income $450,000 The estimated lawsuit expense of $750,000 will be deductible in 2022 when it is expected to be paid. The instalment sales profit will be collected at $300,000 in each of the next two years. The income tax rate is 30% for al years. The total income tax expense to be reported on the income statement is a. $90,000. O b. $135,000. C. $150,000. O d. $300,000 O e. $225,000