Flounder Inc. reports accounting income of $114,000 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 $17,600.
2.		Rent revenue reported on the tax return is $25,900 higher than rent revenue reported on the income statement.
3.		Non-deductible fines appear as an expense of $24,700 on the income statement.
4.		Flounders tax rate is 30% for all years and the company expects to report taxable income in all future years.

Assume that the company follows the taxes payable method of accounting for income taxes under ASPE. During the year, Flounder Inc. made tax instalment payments of $47,900.

QUESTIONS:

A) Calculate the taxable income and income tax expense for the year ended December 31, 2020.

Taxable income		$
Income tax expense		$

B) Prepare the journal entry to record income taxes at December 31, 2020.

Date	Account Titles and Explanation	Debit	Credit
December 31, 2020

C) Prepare the income statement for 2020, beginning with the line Income before income tax.

D) Provide the balance sheet presentation for any resulting income tax accounts at December 31, 2020.

Flounder Inc. (Partial) Balance Sheet