Help Required:

Please refer to the questions and appendixes below. I need help with calculating the estimate of taxes payables, corporate tax installments, and recommended payment schedule, along with the explanations for the changes made (please see required items highlighted in bold). Please note that the company is Canadian, thus all explanations and references has to be made based on the Canada Revenue Agency guidelines and ITA.

Actual Question:

You, CPA, have recently obtained a position with Green Inc. (Green), a manufacturer and distributor of environmentally friendly cleaning products. Jason and Jaclyn Brown started the company 20 years ago in response to concerns over the impact of cleaning products on the environment. Green reports under the accounting standards for private enterprises (ASPE).

As Green is growing and the financial reporting and tax requirements are becoming more complex, Jason and Jaclyn have decided that they need help and have hired you, CPA, as their financial controller.

It is February 10, 2021, and you have just left a meeting with Jason and Jaclyn, and Green's bookkeeper.

Task 1:

Jason hasasked you to provide him with an estimate of taxes payable for the year ended December 31, 2020, using aneffective tax rate of 13% for active business income below the business limitand27% for active business income above the business limit. He would also likeexplanations supporting the adjustments made to net income per the financial statementsin thedetermination of net income for tax purposes and taxable income. Jason provided you with the prior year's corporate income tax return. You reviewed the return and made notes (Appendix I) of relevant information for the current return.

Task 2:

Jason has also asked for your advice onwhether Green should pay any estimated taxes payable now or wait until the tax return is completed, in two to three months.

Task 3: In order to avoid interest and penalties in the future, Jason and Jaclyn have requested that youcalculate Green's corporate income tax instalments for 2021and provide them with arecommended payment schedule. Jason thinks thatGreen's taxable income for 2021will bereduced by approximately 25%from 2020.

Task 4: In addition to your work on Green's estimate of taxes payable, Jason would like youradviceonhow to account for the year-end inventory balanceandrelated revenue.

You are provided with a copy of Green's draft income statement for the year ended December 31, 2020 (Appendix II), as well as other information needed to calculate the taxes payable amount (Appendix III).

Appendix 1: UCC information for UCC calculations

Appendix I Information from the review of Green's 2019 corporate income tax return Closing undepreciated capital cost (UCC) balances at December 31, 2019, after the 2019 capital cost allowance (CCA) claim, were as follows: i) Class 8-$129,250 ii) Class 10 (delivery trucks) - $141,000 iii) Class 10.1 (car driven by Jaclyn Brown) - $14,450 iv) Class 10.1 (car driven by Jason Brown) - $10,300 v) Class 43 $12,500 vi) Class 53-$475,040 The Class 53 opening balance relates to additions made in 2018 prior to the introduction of the accelerated investment incentive.