Coleen Joshua Potato Limited, follows IFRS, is in the process of preparing its financial statements for its second year of operations ending December $31$st$,2023.$ Pertinent information follows:

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Accounting income before tax is $$13,000,000.$

Depreciation on property, plant and equipment is $ $1,200,000$ and CCA claimed is $$2,000,000.$

The company sells a product with a $2-$year warranty. The estimated warranty cost on an Accrual basis is $$4,000,000$ and spent $$1,800,000$ on a Cash Basis.

The accounting income before tax included a $$500,000$ fine.

On January $1$st$,2023,$ the company received three years advance rent income $($for $2023$ through $2025)$ of $ $750,000,$ which was recorded as unearned revenue for book purposes, but which must be reported as $2023$ revenue for income tax purposes.

The tax rate for years prior to $2023$ was $40\mathrm{.}0\%$; for $2023$ the tax rate is $50\mathrm{.}0\%.$

The balance $($credit$)$ in the Future Income Tax Liability account as of December $31$st$,2022,$ was $$275,000.$

This Examination Has Been Prepared by the House of Timujin and Subject to Copy Right Laws. Unauthorized Copying, Downloading, Distribution or Transmission is Strictly Prohibited!

Required:

This Examination Has Been Prepared by the House of Timujin and Subject to Copy Right Laws. Unauthorized Copying, Downloading, Distribution or Transmission is Strictly Prohibited!

Prepare the compound journal entry to record the Income Tax for $2023.$

Prepare the $2023$ income statement, beginning with income before income taxes.