• A Show the taxable income/loss for each year and prepare income tax journal entries for 2018, 2019, 2020 and 2021.

• Prepare the income statement for 2021, beginning with the line “Income before income tax.”

Select financial information for Taron Incorporated (“TI”), a Canadian corporation, is as follows:

		2018	2019	2020	2021
Income before tax		$ 144,000	$ 216,000	$ (480,000)	$ 185,000
Depreciation Expense		192,000	192,000	192,000	192,000
CCA claimed		192,000	384,000	192,000	48,000
Tax rate applicable		35%	38%	38%	38%

Other information:

• TI began operations in 2018 and has a December 31 year end

• The original cost of fixed assets purchased was $960,000 and no additional fixed assets have been purchased since the company began operations.

• In 2018, the company pay non-deductible fines of $26,000.

• In 2020, management decided it would carry back the losses to 2018 and 2019, and would carry any remainder forward; management has determined that it is more likely than not that any unused loss carry-forwards will be utilized in the future.