Blue Spruce Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company won a contract to build a road for the municipality of Cochrane West. It is estimated that the project will be completed over a three-year period starting in June 2020. Blue Spruce uses the percentage-of-completion method of recognizing revenue on its long-term construction contracts. For tax purposes, and in order to postpone the tax on such revenue for as long as possible, Blue Spruce uses the completed-contract method allowed by the CRA. By its first fiscal year end, the accounts related to the contract had the following balances: Accounts Receivable Contract Asset/Liability (net of billings to date of $406,000) Revenue from Long-Term Contracts Construction Expenses $342.000 113,000 519,000 367,000 The accounts related to the equipment that Blue Spruce purchased to construct the road had the following balances at the end of the first fiscal year ended December 31, 2020 for accounting and tax purposes: Equipment Accumulated Depreciation Equipment Undepreciated Capital Cost $1,120,000 184,000 994,000 Blue Spruce's tax rate is 25% for 2020 and subsequent years. Income before income tax for the year ended December 31, 2020, was $186,000. Blue Spruce reports under IFRS. Calculate the deferred tax asset or liability balances at December 31, 2020. Deferred tax $ e Textbook and Media List of Accounts Calculate taxable income and income tax payable for 2020. $ Taxable income Income tax payable $ e Textbook and Media List of Accounts Prepare the journal entries to record income taxes for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Ac Title Explanation Debit Credit (To record current tax expense) (To record deferred tax expense) e Textbook and Media List of Accounts Prepare the income statement for 2020, beginning with the line "Income before income tax." Blue Spruce Tar and Gravel Ltd. (Partial) Income Statement V $ $ $ e Textbook and Media List of Accounts Provide the SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020. Blue Spruce Tar and Gravel Ltd. (Partial) Statement of Financial Position V $ e Textbook and Media List of Accounts Provide the balance sheet presentation for any resulting deferred tax balance sheet accounts at December 31, 2020, assuming Blue Spruce follows ASPE. Blue Spruce Tar and Gravel Ltd. (Partial) Balance Sheet $ e Textbook and Media List of Accounts List of Accounts Assistance Used Allowance to Reduce Deferred Tax Asset to Expected Realizable Value Allowance to Reduce Future Tax Asset to Expected Realizable Value Current Tax Benefit Current Tax Benefit - Discontinued Operations Current Tax Expense Current Tax Expense - Discontinued Operations Current Tax Payable Deferred Tax Asset Deferred Tax Benefit Deferred Tax Benefit - Discontinued Operations Deferred Tax Benefit-OCI Deferred Tax Expense Deferred Tax Expense - Discontinued Operations Deferred Tax Expense-OCI Deferred Tax Liability FV-NI Investments FV-OCI Investments Future Tax Asset Future Tax Benefit Future Tax Expense Future Tax Liability Income Tax Payable Income Tax Receivable Investment Income or Loss Land No Entry Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss-OCI Blue Spruce Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company won a contract to build a road for the municipality of Cochrane West. It is estimated that the project will be completed over a three-year period starting in June 2020. Blue Spruce uses the percentage-of-completion method of recognizing revenue on its long-term construction contracts. For tax purposes, and in order to postpone the tax on such revenue for as long as possible, Blue Spruce uses the completed-contract method allowed by the CRA. By its first fiscal year end, the accounts related to the contract had the following balances: Accounts Receivable Contract Asset/Liability (net of billings to date of $406,000) Revenue from Long-Term Contracts Construction Expenses $342.000 113,000 519,000 367,000 The accounts related to the equipment that Blue Spruce purchased to construct the road had the following balances at the end of the first fiscal year ended December 31, 2020 for accounting and tax purposes: Equipment Accumulated Depreciation Equipment Undepreciated Capital Cost $1,120,000 184,000 994,000 Blue Spruce's tax rate is 25% for 2020 and subsequent years. Income before income tax for the year ended December 31, 2020, was $186,000. Blue Spruce reports under IFRS. Calculate the deferred tax asset or liability balances at December 31, 2020. Deferred tax $ e Textbook and Media List of Accounts Calculate taxable income and income tax payable for 2020. $ Taxable income Income tax payable $ e Textbook and Media List of Accounts Prepare the journal entries to record income taxes for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Ac Title Explanation Debit Credit (To record current tax expense) (To record deferred tax expense) e Textbook and Media List of Accounts Prepare the income statement for 2020, beginning with the line "Income before income tax." Blue Spruce Tar and Gravel Ltd. (Partial) Income Statement V $ $ $ e Textbook and Media List of Accounts Provide the SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020. Blue Spruce Tar and Gravel Ltd. (Partial) Statement of Financial Position V $ e Textbook and Media List of Accounts Provide the balance sheet presentation for any resulting deferred tax balance sheet accounts at December 31, 2020, assuming Blue Spruce follows ASPE. Blue Spruce Tar and Gravel Ltd. (Partial) Balance Sheet $ e Textbook and Media List of Accounts List of Accounts Assistance Used Allowance to Reduce Deferred Tax Asset to Expected Realizable Value Allowance to Reduce Future Tax Asset to Expected Realizable Value Current Tax Benefit Current Tax Benefit - Discontinued Operations Current Tax Expense Current Tax Expense - Discontinued Operations Current Tax Payable Deferred Tax Asset Deferred Tax Benefit Deferred Tax Benefit - Discontinued Operations Deferred Tax Benefit-OCI Deferred Tax Expense Deferred Tax Expense - Discontinued Operations Deferred Tax Expense-OCI Deferred Tax Liability FV-NI Investments FV-OCI Investments Future Tax Asset Future Tax Benefit Future Tax Expense Future Tax Liability Income Tax Payable Income Tax Receivable Investment Income or Loss Land No Entry Retained Earnings Unrealized Gain or Loss Unrealized Gain or Loss-OCI