Exercise 18-15

Culver Inc. reports accounting income of $111,000 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.

1.		Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $14,600.
2.		Rent revenue reported on the tax return is $21,900 higher than rent revenue reported on the income statement.
3.		Non-deductible fines appear as an expense of $13,200 on the income statement.
4.		Culvers tax rate is 30% for all years and the company expects to report taxable income in all future years. Culver reports under IFRS.

Calculate taxable income and income tax payable for 2020.

Taxable income for 2020		$enter a dollar amount
Income tax payable for 2020		$enter a dollar amount

SHOW LIST OF ACCOUNTS

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Calculate any deferred tax balances at December 31, 2020.

Deferred tax select an option assetliability

$enter a dollar amount

Prepare the journal entries to record income taxes for 2020. (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.)

Year	Account Titles and Explanation	Debit	Credit
2020	enter an account title to record current tax expense	enter a debit amount	enter a credit amount
	enter an account title to record current tax expense	enter a debit amount	enter a credit amount
	(To record current tax expense)
2020	enter an account title to record deferred tax benefit	enter a debit amount	enter a credit amount
	enter an account title to record deferred tax benefit	enter a debit amount	enter a credit amount
	enter an account title to record deferred tax benefit	enter a debit amount	enter a credit amount
	(To record deferred tax benefit)

Prepare the income tax expense section of the income statement for 2020, beginning with the line Income before income tax.

Culver Inc. (Partial) Income Statement choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Month Ended December 31, 2020
select an income statement item Income Tax Expense - CurrentNet Income / (Loss)Deferred Tax LiabilityIncome Tax Expense - Deferred (Benefit)Deferred Tax AssetCurrent Income Tax BenefitIncome Before Income Tax				$enter a dollar amount
select an income statement item Deferred Tax Asset Net Income / (Loss) Income Before Income Tax Deferred Tax Liability Income Tax Expense - Current Current Income Tax Benefit Income Tax Expense - Deferred (Benefit)		$enter a dollar amount
select an income statement item Net Income / (Loss) Current Income Tax Benefit Deferred Tax Asset Income Tax Expense - Current Deferred Tax Liability Income Tax Expense - Deferred (Benefit) Income Before Income Tax		enter a dollar amount
				enter a subtotal of the two previous amounts
select a closing name for this statement Income Before Income TaxIncome Tax Expense - CurrentDeferred Tax LiabilityIncome Tax Expense - Deferred (Benefit)Net Income / (Loss)Current Income Tax BenefitDeferred Tax Asset				$enter a total net income or loss amount