Cullumber Services Income Statement For the Year Ended December 31, 2020 Revenue 1. Cullumber is publicly owned and uses IFRS. It has an income tax rate of 25%. The dividend revenue represents dividends received from taxable Canadian corporations. 2. During the year warranty expense of $50,000 was accrued. $10,000 of this amount was paid in cash during 2020 . This is the first year Cullumber offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $579,000 on January 1, 2019. These assets are being depreciated on a straight-line basis over six years with no residual value. For tax purposes the assets are classified as Class 8,20%. This PPE is considered "eligible equipment" for purposes of the Accelerated Investment Incentive (the "All") (under the All, instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). This rate was used for 2019. 4. Cullumber pays for life insurance policies for its top executives. During 2020, one of the executives died, and the company received a payment of $98,000 from the life insurance company. 5. On July 1, Cullumber was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $22,600. 6. On November 15,$30,000 was received from a customer for three months of service, beginning on November 15 . One half of this amount was earned and included in revenue for 2020 . Advance payments are included in taxable income when the cash is received. 7. On December 1 , one of the company executives received a speeding ticket for $150. The company paid the ticket for the executive and recorded the cost as an office expense. Prepare the journal entries to record 2020 income taxes (current and deferred). (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 0 for the amounts.) Cullumber Services Income Statement For the Year Ended December 31, 2020 Revenue 1. Cullumber is publicly owned and uses IFRS. It has an income tax rate of 25%. The dividend revenue represents dividends received from taxable Canadian corporations. 2. During the year warranty expense of $50,000 was accrued. $10,000 of this amount was paid in cash during 2020 . This is the first year Cullumber offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $579,000 on January 1, 2019. These assets are being depreciated on a straight-line basis over six years with no residual value. For tax purposes the assets are classified as Class 8,20%. This PPE is considered "eligible equipment" for purposes of the Accelerated Investment Incentive (the "All") (under the All, instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). This rate was used for 2019. 4. Cullumber pays for life insurance policies for its top executives. During 2020, one of the executives died, and the company received a payment of $98,000 from the life insurance company. 5. On July 1, Cullumber was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $22,600. 6. On November 15,$30,000 was received from a customer for three months of service, beginning on November 15 . One half of this amount was earned and included in revenue for 2020 . Advance payments are included in taxable income when the cash is received. 7. On December 1 , one of the company executives received a speeding ticket for $150. The company paid the ticket for the executive and recorded the cost as an office expense. Prepare the journal entries to record 2020 income taxes (current and deferred). (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 0 for the amounts.)
