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[61] DAC reported pre-tax accounting income of $300,000 for the calendar year 2020. To calculate the income tax liability, the following data were considered: CCA
[61] DAC reported pre-tax accounting income of $300,000 for the calendar year 2020. To calculate the income tax liability, the following data were considered: CCA in excess of depreciation $20,000 Instalment of advance tax payments made during 2020 $25,000 Enacted income tax rate for 2020 30% What amount should DAC report as its current income tax liability on its December 31, 2020 Balance Sheet? Select one: a. $20,000 O b. $26,000 c. $59,000 d. $51,000 e. The current income tax liability cannot be determined from the information given. [62] DAC purchased equipment very late in 2019. Based on generous capital cost allowance rates provided in the Income Tax Act, the company claimed CCA on its 2019 tax return but did not record any depreciation because the equipment was still being tested. This temporary difference is expected to reverse and the excess CCA allowed in 2019 would result in equal net taxable amounts in each of the next three years. This is the only timing difference in 2019. Enacted tax rates (all known at the end of 2019) are 40% in 2019, 35% in 2020 and 2021, and 30% in 2022. DAC reported a pretax accounting income of $12,000,000 for the financial year ending December 31, 2019. Based on a reconciliation of the pre-tax accounting income, the company prepared the following journal entry to record the tax payable for the year: DR Current Income Tax Expense $4,365,000 CR Income Tax payable $4,365,000 The total future tax liability to be reported on the company's balance sheet at December 31, 2019, is Select one: 0 a. $$335,000 O b. $362,500 O c. $318,125 O d. $312,500 O e. none of the above numbers
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