During 2020, the following items caused taxable income to be different than accounting income:

• For tax purposes, CCA was $172,800 in 2020. The year-end book value is $720,000 and the tax value is $691,200.
• In 2020 Killim Inc. paid $72,000 rent in advance for 2020 ($36,000) and 2021 ($36,000). The Canada Revenue Agency (CRA) allows the deduction of actual rent payments when they are paid. By December 31, 2020, Killim had a balance of $36,000 in Prepaid Rent.
• In 2020, dividends of $24,000 were received from a taxable Canadian corporation and included in accounting income. These dividends are not taxable.
• In 2020, a golf club membership of $7,200 was an expense in arriving at accounting income. This is not an allowable deduction for tax purposes.
• In 2020, Killim Inc. offered a warranty on goods sold. Warranty expenses for 2020 were $26,400 and warranty cash payments in 2020 were $9,600. The balance of the warranty liability on the statement of financial position is $16,800. The Canada Revenue Agency (CRA) allows the deduction of actual warranty costs when they are paid.

Required:

( a ) Calculate taxable income for 2020.

( b ) Calculate current income taxes payable for 2020.

( c ) Calculate the balance of any deferred income taxes asset and deferred income tax liability at December 31, 2020. Do this for each item and identify any balances as either a deferred tax asset or a deferred tax liability.

(d ) Prepare the journal entry(s) to record current income taxes for 2020 and record an entry for of the deferred tax determined in part c.

During 2020, the following items caused taxable income to be different than accounting income:

• For tax purposes, CCA was $172,800 in 2020. The year-end book value is $720,000 and the tax value is $691,200.
• In 2020 Killim Inc. paid $72,000 rent in advance for 2020 ($36,000) and 2021 ($36,000). The Canada Revenue Agency (CRA) allows the deduction of actual rent payments when they are paid. By December 31, 2020, Killim had a balance of $36,000 in Prepaid Rent.
• In 2020, dividends of $24,000 were received from a taxable Canadian corporation and included in accounting income. These dividends are not taxable.
• In 2020, a golf club membership of $7,200 was an expense in arriving at accounting income. This is not an allowable deduction for tax purposes.
• In 2020, Killim Inc. offered a warranty on goods sold. Warranty expenses for 2020 were $26,400 and warranty cash payments in 2020 were $9,600. The balance of the warranty liability on the statement of financial position is $16,800. The Canada Revenue Agency (CRA) allows the deduction of actual warranty costs when they are paid.

Required:

( a ) Calculate taxable income for 2020.

( b ) Calculate current income taxes payable for 2020.

( c ) Calculate the balance of any deferred income taxes asset and deferred income tax liability at December 31, 2020. Do this for each item and identify any balances as either a deferred tax asset or a deferred tax liability.

(d ) Prepare the journal entry(s) to record current income taxes for 2020 and record an entry for of the deferred tax determined in part c.