Marbec inc. is a public company that began operations on January 1, 2020, and it has provided the following information.

Pre-tax accounting income for 2020 is $200,000. The tax rate enacted for 2020 and future years is 30%. Differences between the 2020 income statement and tax return are listed below. Warranty expense accrued for financial reporting purposes amounts to $5,000 and warranty cost deductions per the tax return amount to $2,000. Gross profit on construction contracts using the percentage-of-completion method amounts to $30,000, with revenue from long-term contracts of $90,000 and related construction expenses of $60,000. Gross profit on construction contracts completed for tax purposes was $0. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000 relating to equipment purchased on January 1, 2020, for $600,000 with an expected useful fe of 10 years. Capital cost allowance for these assets is based on CCA Class 8, $180,000. A $3,500 fine paid for violation of pollution laws was deducted in calculating pre-tax accounting income. A tax exempt dividend was received from a taxable Canadian corporation amounting to $1,400.

Instructions

a. Calculate taxable income for 2020.

b. Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2020