Melissa Inc., a private company that reports under IFRS, has an accounting income before tax of $250,000 for 2022, its second year of operations. The following items cause taxable income to be different than the income reported on the financial statements.

1. Melissa Inc. suffered a net loss of $60,000 in 2021. This was also the amount of the loss for tax purposes. Melissa would apply this tax loss against its 2022 taxable income.

2. Melissa Inc. has equipment costing $200,000 purchased in 2021, on which it has recorded annual depreciation of $40,000 in each of the years 2021 and 2022. Due to the loss in 2021, the company did not claim any CCA on the equipment for that year. It decides to claim the maximum CCA allowable of $60,000 in 2022.

3. In 2022, Melissa Inc. paid rent for three years, amounting to $72,000. It recorded $24,000 as rent expense and the remainder as Prepaid rent. For tax purposes, rent is deductible when paid.

4. Non-deductible fines appear as an expense of $5,000 on the income statement.

5. Melissa Inc. received a dividend from a foreign company amounting to $3,000. This dividend is taxable and has been included in the accounting income for 2022.

6. Melissa Inc. incurred $16,000 in Meals and Entertainment expense.

7. Warranty expense amounting to $20,000 was recorded for 2022. Actual warranty costs incurred were $15,000.Melissa's tax rate is 30% for 2022 and 2023, and 28% for 2024 and beyond. These tax rates were enacted in 2021. The company expects to report taxable income in all future years.

Required:

a) Calculate the following amounts. Show all calculations for marks:

i. Taxable Income for 2022 (7 marks)

ii. Deferred tax asset (liability) on January 1, 2022 – specify whether asset or liability 

iii. Deferred tax asset (liability) on December 31, 2022 – specify whether asset or liability 

b) Prepare the required journal entries to record the income tax expense for the year 2022 

c) Prepare a partial income statement showing how the information related to income taxes will be presented 

d) Prepare a partial balance sheet showing clearly how and under what section the information related to income taxes will be presented.