Peace Arch Limited (PAL) as determined a preliminary pre-tax income $550,000 for the year ended December 31, 2018. The following Statement of Retained Earnings is provided for the year ended December 31, 2017. Retained earnings, January 1, 2017....... $3,893,000 Net income... 834,000 Capital deficiency charges. (27,000) Dividends declared. (200,000) Retained earnings, December 31, 2017... $4,500,000 Dividends paid during 2018 were $270,000 with dividends payable balances at the end of 2017 and 2018 of $60,000 and $90,000 respectively. During 2018, PAL redeemed common shares at a cost in excess of the carrying value of the shares of $22,000; there were no associated contributed surplus accounts. The following information is available before the financial year end is finalized. 1. In January, 2017, the company acquired capital assets for $2,200,000 + 5% GST. At that time, these assets had an estimated useful life of 10 years with a salvage value of $350,000 and were being amortized on a straight line basis. In 2017, the company received a government grant of $400,000 relating solely to the capital asset purchase, as an economic development incentive which the accountant credited to miscellaneous income. Management realized in 2018 that this grant should have reduced the cost of the asset but the accountant had already provided for depreciation for 2018 based on the $2,200,000 cost. 2. PAL applied Weighted Average inventory valuation in the determination of the above preliminary net income. The company has considered industry practice and will change its method of inventory valuation to FIFO cost effective with 2018 and has determined that this policy should be applied retrospectively. Inventory balances under the two valuation bases have been determined to be as follows: Year-end FIFO Weighted Average 2015 $400,000 $398,000 2016 440,000 425,000 2017 470,000 452,000 2018 500,000 476,000 3. PAL's tax rate is 30% for all years.Requirement 1 Prepare a schedule detailing the calculation of the correct/revised net (after tax) income to report for 2018. Show any supporting calculations, as needed, for any adjustments to the preliminary, pre-tax income. Hint: Make all necessary adjustments and then calculate the tax expense as one figure. Requirement 2 (the enabling entries) Prepare all applicable entries, with supporting computations, required to reflect the above events. Note the distinction and provide entries as grouped below. Entries required to adjust the beginning-of-year financial position. Apply the 'deferred tax liability' account, if needed, for any associated tax adjustments. (these entries will be balance sheet entries only):Page