Pina Colada Inc. reports accounting income of $115,000 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.

1.		Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $10,600.
2.		Rent revenue reported on the tax return is $15,900 higher than rent revenue reported on the income statement.
3.		Non-deductible fines appear as an expense of $7,600 on the income statement.
4.		Pina Coladas tax rate is 30% for all years and the company expects to report taxable income in all future years. Pina Colada reports under IFRS.

A) Calculate taxable income and income tax payable for 2020.

Taxable income for 2020:

Income tax payable for 2020:

B) Calculate any deferred tax balances at December 31, 2020.

deferred Tax (asset/liability):

C) Prepare the journal entries to record income taxes for 2020.

Year	Account Titles and Explanation	Debit	Credit
2020
	(To record current tax expense)
2020
	(To record deferred tax benefit)

D) Prepare the income tax expense section of the income statement for 2020, beginning with the line Income before income tax.

E) Reconcile the statutory and effective rates of income tax for 2020.

F) Provide the SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020.

G) Provide the SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020. Assume that Pina Colada follows ASPE.