ASAP

Question 1 (18 marks) Part 1 (4 marks) Listed below are items that are treated differently for accounting purposes than they are for tax purposes. Indicate whether the items are permanent differences or reversible differences. For reversible differences, indicate whether they will create defer tax assets or deferred tax liabilities. (1 mark each) 1) Membership costs for executives at a local golf and country club. 2) Estimated future warranty costs. 3) Excess CCA over accounting depreciation. 4) Premiums paid on life insurance of key officers and the company is the beneficiary. Part 2 (14 marks) The records for Falcons Inc. show the following data for calendar 2023: 1) Pre-tax accounting income is \\( \\$ 175000 \\). The enacted income tax rate is \28. 2) The gross profit on construction contracts calculated using percentage of completion recorded on the books was \\( \\$ 100000 \\). No contracts were completed in 2023 and so the gross profit for tax purposes was \\( \\$ 0 \\). 3) Interest paid on late and deficient tax instalments was \\( \\$ 3000 \\) 4) Equipment was acquired in January 2023 for \\( \\$ 300000 \\). Falcons use straight-line depreciation over a ten-year and there is no residual value expected. For tax purposes, Falcons use CCA at \15 for 2023, ignore the half-year-rule. 5) Falcons held FV-NI investments on which \\( \\$ 1500 \\) unrealized losses were recorded at the end of 2023. Instructions a) Prepare a schedule, starting with pre-tax income, to compute the taxable income. (7 marks) b) Prepare the required entries to record the income taxes for 2023 . Record the applicable deferred tax asset / benefit, deferred tax liability / expense, separately, if applicable. (3 marks) c) Calculate Falcnons' effective income tax rate for 2023. (2 marks) d) Given a statutory income tax rate of \28, prepare the reconciliation of the effective tax rate to the statutory rate. ( 2 marks)