Gilmore Ltd. started as a manufacturing company on January 1, 2021. On January 1, 2021, Gilmore purchased $75,000 of equipment which it is amortizing on a straight-line basis over 5 years for accounting purposes under IFRS. The equipment is subject to a 15% CCA rate for income tax purposes, and is subject to the Accelerated Investment Incentive (AII) in the year of acquisition.

In 2021, Gilmore reported net income before income taxes of $215,460. Included on the companys income statement was meals and entertainment expense of $20,000. At the end of 2022, Gilmore reported net income before taxes of $233,875, and meals and entertainment expense of $32,000.

The income tax rate for 2021 was 24%. On February 28, 2022, the tax rate for 2022 and later years dropped to 21%. This rate change was not known at the end of 2021.

REQUIRED:

Prepare the journal entries required to record Gilmore Ltd.s income taxes for 2021 and 2022. Show all your calculations. (9 Marks)

Please use the following :

Calculation of DIT Asset/Liability resulting from CCA vs Depreciation				Depreciation	15000
Year	Base	CCA	UCC
2021
2022
Year	CCA (Tax)	Depreciation (GAAP)	Timing Difference	Tax Rate	DIT Asset/(Liability)
2021
2022
Totals
2021	Current Income Tax Calculation
	Accounting Income
	Permanent Difference(s)
	Temporary Difference(s)
	Taxable Income
	Tax Rate
	Current Income Tax
2021	Journal Entries
	Account Name			Debit	Credit
2022	Current Income Tax Calculation
	Accounting Income
	Permanent Difference(s)
	Temporary Difference(s)
	Taxable Income
	Tax Rate
	Current Income Tax
2022	Journal Entries
	Account Name			Debit	Credit