Company A is a public company founded in 2014. The 2017- and 2016-income tax rate is 50% but recently enacted (i.e. 2017) legislation specifies that for the year 2018 the rate will drop to 40 %. The rate will further drop to 35 % for 2019 and thereafter. All of these rates are known at the end of 2017. CA has income before tax for accounting purposes in 2017 of $150000. CA paid income tax of $200000 in 2016 after two years of break even. The following additional information is available: Year 2017 depreciation was $250000 and is expected to be the same through to 2019, when the asset will be fully depreciation. CCA in 2017 was $1000000, and is expected to be $50000 in 2018, $130000 in 2019, and $10000 in 2020, after which it will be fully deducted for tax purposes as well. There is an opening deferred income tax asset of $220000 related to these differences. There were no additions or disposal in 2017. Accounting income contains a $50000 expense for non-tax-deductible life insurance premium on CAs executives A pension asset exists on the balance sheet for 2017 in the amount of $1.8 million. This represents the cumulative excess of funding over amounts expensed. The asset was $1 million at the beginning of the year. The company is entitled to a tax deduction when funding is made. CA sold $150000 of bonds issued by the government of Canada at a gain of $88000, which was included as other income in its income statement. Only 50 % of this gain is taxable. The other 50% will never be taxed. The company had to perform an impairment test on its vacant land due to an unfavorable zoning issue. It has an original cost of $2000000 and had to be written down to $1500000. Accounting impairment losses are not recognized for tax purpose until realized. CA has investment in the stock market that for accounting purposes are recorded at fair value. For tax purposes nothing is taxable until sold. The gain on the sale for tax purposes is one half of the normal rate. The relevant amounts are as follows: 1. Investments at fair value, end of the year $600000 2. Investments at cost, end of the year $500000 3. Investments at fair value, beginning of year $400000 4. Investments at cost, beginning of the year $450000

5. There was no sale in the year. 6. The company acquired additional securities costing $50000 in 2017 . Required Prepared all journal entries and required disclosure to record CA 2017 income tax. Show supporting calculations. (Hint: do each calculation / journal entry separately , with no offsetting and assume that any deferred tax assets are probable to be realized).