Egor's Electric Bike (EEB), a publicly traded company, reported net income before tax of $2,750,000 for the year ended December 31, 2021. Operating income for year ended December 31, 2021 included the following items: 1. Dividends received from taxable Canadian corporations, not taxable to EEB: $165,000 2. Business meals : $126,000, only 50% of which are deductible for tax purposes. 3. Interest and penalties of $17,000 from a tax dispute with Canada Revenue Agency, which are not deductible for tax purposes. 4. Warranty expense (estimate): $185,000 5. Rent expense: $80,000 6. Depreciation: $1,750,000

At January 1, 2021, EEB's had the following balances related to capital assets: Net book value (accounting) Undepreciated capital cost (tax) Deferred tax liability* *The tax rate in 2020 was 36%. Hint: These are beginning of year balances. Don't forget to deduct CCA and depreciation for the year.

Other pertinent balances and information: a. Warranty liability (provision) at January 1, 2021: $2,650,000 b. Prepaid rent at January 1, 2021: $240,000 (36 months remain prepaid). This rent was deducted for tax purposes when paid. c. Deferred Tax Asset at January 1, 2021 from 2020 loss carry-forward: $1,152,000 This asset was calculated based on a 2020 tax loss ($3,200,000) = ($1,152,000/36%*). d. Warranties paid (settled) during 2021: $225,000 e. Capital cost allowance claimed for the year ended 2021 was $2,000,000. f, There were no significant capital asset additions or disposals in 2021. g. The enacted tax rate for 2021 is 32%. *The enacted tax rate in 2020 was 36%. Begin with accounting income and reconcile to taxable income (loss). Separate permanent and temporary differences. Question Required #1 Current tax reconciliation: