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$ % 8-98 condition Formatting BIU A E Meie & Cunter- Alignment Number Font & > Account Titles E D F G B Question 4

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$ % 8-98 condition Formatting BIU A E Meie & Cunter- Alignment Number Font & > Account Titles E D F G B Question 4 (8 marks) Malley Corporation has the following balances from the year end December 31, 2019: Deferred Tax Asset $9,000 debit Deferred Tax Liability": 11,800 credit The deferred tax asset was as a result of a loss to be carried forward of $30,000. - Deferred Tax Liability was from the difference between the Unallocated Capital Cost Allowance and the Book Value of Property, Plant and Equipment items. During 2020, the following information was provided: 1. Net income before income tax $875,000 2. $42,000 for meals and entertainment expenses. 3. Malley used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $40,000. For tax purposes, Malley claimed the maximum capital cost allowance of $78,000. On December 31, 2020, the UCC balance was $120,000 and the book value was $140,000 4. Malley commenced selling widgets and recorded warranty accruals of $27,000, actual warranty Summary Info Question 1 Question 2 Question 3 Question 4 Questions Type here to search O & P Times New Roman - 12 AA 2. Wag lol ili lil BUB Merge Center $ %) 893 condo Formatting Font Alignment Number ON 28 3 Account Titles B F E D allowance of $78,000. On December 31, 2020, the UCC balance was $120,000 and the book value was $140,000 4. Malley commenced selling widgets and recorded warranty accruals of $27,000, actual warranty costs paid was $15,000 with the remaining $12,000 expected to be paid in 2021. 5. Malley received $8,000 in dividends from a taxable Canadian corporation 6. The income tax rate was 30% for 2019 and 2020. The federal government announced that tax rates would increase to 31%, effective January 1, 2021, Malley has been advised of the enacted rate change, REQUIRED: a) Calculate the taxable income for 2020 (4 marks) b) Prepare the journal entries to record any current and deferred income taxes for 2020 assuming the loss carryforward is applied to 2020. Show all your calculations. (4 marks) Summary Info Question 1 Question 2 Question 3 Question 4 Questions Type here to search P

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