Question
Hi experts, I need your help with these questions. Thank you in Advance! The following information applies to Sheffield Corporation, which reports under IFRS. 1.
Hi experts, I need your help with these questions. Thank you in Advance!
The following information applies to Sheffield Corporation, which reports under IFRS.
1. | Prior to 2019, taxable income and accounting income were identical. | ||
2. | Accounting income was $1.7 million in 2019 and $1.41 million in 2020. | ||
3. | On January 1, 2019, equipment costing $1.25 million was purchased. It is being depreciated on a straight-line basis over eight years for financial reporting purposes, and is a Class 8-20% asset for tax purposes. | ||
4. | Tax-exempt interest income of $70,000 was received in 2020. | ||
5. | The tax rate is 30% for all periods. | ||
6. | Taxable income is expected in all future years. | ||
7. | Sheffield Corporation had 100,000 common shares outstanding throughout 2020. |
Calculate the amount of capital cost allowance and depreciation expense for 2019 and 2020, and the corresponding carrying amount and undepreciated capital cost of the depreciable assets at the end of 2019 and 2020.
Capital Cost | Undepreciated | Depreciation | Net Book | |||||
---|---|---|---|---|---|---|---|---|
Allowance | Capital Cost | Expense | Value | |||||
2019 | $ | $ | $ | $ | ||||
2020 |
List of Accounts
Determine the amount of current and deferred tax expense for 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Current income tax expense | $ | ||
Deferred tax expense | $ |
List of Accounts
Prepare the journal entries to record 2020 income taxes. (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.)
Date | Account Titles and Explanation | Debit | Credit |
December 31, 2020 | |||
(To record current tax expense) | |||
December 31, 2020 | |||
(To record deferred tax expense) |
List of Accounts
Prepare the bottom portion of Sheffields 2020 income statement, beginning with the line Income before income tax. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Round Earning Per Share to 2 decimal places, e.g. 15.25.)
Sheffield Corporation (Partial) Income Statement For the Month Ended December 31, 2020December 31, 2020For the Year Ended December 31, 2020 | |||||
Earnings Per ShareIncome Tax Expense - DeferredIncome Tax Expense - CurrentCurrent Income Tax BenefitDeferred Tax LiabilityNet Income / (Loss)Deferred Tax AssetIncome Before Income Tax | $ | ||||
Income Tax Expense - CurrentDeferred Tax LiabilityEarnings Per ShareIncome Tax Expense - DeferredIncome Before Income TaxDeferred Tax AssetNet Income / (Loss)Current Income Tax Benefit | $ | ||||
Income Before Income TaxDeferred Tax AssetIncome Tax Expense - DeferredDeferred Tax LiabilityNet Income / (Loss)Earnings Per ShareCurrent Income Tax BenefitIncome Tax Expense - Current | |||||
Current Income Tax BenefitIncome Tax Expense - CurrentDeferred Tax LiabilityDeferred Tax AssetIncome Before Income TaxEarnings Per ShareIncome Tax Expense - DeferredNet Income / (Loss) | $ | ||||
Income Tax Expense - CurrentEarnings Per ShareDeferred Tax AssetDeferred Tax LiabilityCurrent Income Tax BenefitNet Income / (Loss)Income Tax Expense - DeferredIncome Before Income Tax: | |||||
Income Tax Expense - DeferredCurrent Income Tax BenefitIncome Before Income TaxNet Income / (Loss)Deferred Tax LiabilityIncome Tax Expense - CurrentDeferred Tax AssetEarnings Per Share | $ |
List of Accounts
Indicate how deferred taxes should be presented on the December 31, 2020 SFP.
Sheffield Corporation (Partial) Statement of Financial Position For the Year Ended December 31, 2020December 31, 2020For the Month Ended December 31, 2020 | |||
Current LiabilitiesLong-Term LiabilitiesShareholders' EquityCurrent AssetsNon-Current Assets | |||
$ |
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