Please see my attached document

I want an accounting tutor to help me work on this assignment.

For each question, please show me the detailed calculation and process.

The questions are based on the intermediate accounting, corporate tax chapter

www.telfer.uOttawa.ca Brocklin Ltd (BL) is a retailer with a December 31 year end. The comptroller at BL has recently resigned, and you were hired to assist the senior accountant to prepare the required 20X3 year-end adjustments. Your work is pretty much complete, except for the income tax journal entries that remain to be prepared. You have summarized the relevant information as follows: 1) Income before income taxes amounts to $310,000 for 20X3. 2) At the end of 20X2, BL had a loss carryforward of $80,000. On 31 December 20X2, management considered that it was more probable than not that future taxable income would be sufficient to take advantage of this loss. 3) During 20X3, BL received intercorporate dividends totaling $70,000 which are not taxable. 4) At the beginning of 20X3, the undepreciated capital cost amounted to $950,000 and the carrying value of capital assets was $1,200,000. The amortization expense and capital cost allowance deduction amount respectively to $200,000 and $230,000 for 20X3. There were no acquisitions or disposals of fixed assets in 20X3. 5) In 20X3, the company incurred entertainment costs of $40,000 out of which 50 % is not deductible for tax purposes. 6) BL has introduced a defined benefit pension plan in 20X3. The total costs related to this plan amount to $160,000 for 20X3 and are detailed as follows: Service cost: $150,000; Net interest: $10,000; Remeasurements: $0. The amount deductible for tax purposes corresponds to the contributions of $100,000 made by BL to the plan in 20X3. 7) At the beginning of 20X2, BL signed an operating lease (as a lessee). Annual payments made under this lease contract are $100,000 and are totally deductible for tax purposes. When BL signed this contract, the lessor required an additional lump sum payment of $40,000 which was immediately deductible for tax purposes. For accounting purposes, BL considered this amount as a prepaid rent, and amortizes it over a period of four years. A prepaid rent of $30,000 was reported on the balance sheet at 31 December 20X2. 8) BL made income tax instalments of $60,000 in 20X3. The company also received a tax refund of $20,000 in relation to its tax loss of 20X2. Indeed, part of this loss was carried back to recover income taxes paid in previous years. 9) The tax rate was 30 % in 20X2. On 30 November 20X3, it increased to 35 % and this rate applied to 20X3 fiscal year. On 15 January, government announced another increase in corporate tax rates applicable from 1 January 20X4. As a consequence, BL's tax rate increased to 40 %. Required 1) Prepare the journal entries to record the income tax expense for 20X3. www.telfer.uOttawa.ca 2) Prepare the lower part of the income statement for 20X3 that will show the current and future portions of the income tax expense. 3) Prepare a partial balance sheet as of 31December 20X3 that will present the accounts and amounts related to income taxes. 4) Prepare a partial cash flow statement for 20X3 that will present the accounts and amounts related to income taxes. 5) Prepare the effective tax rate required disclosures for 20X3. Prepare this note using percentages. Future Income Taxes Journal Entries Current period income taxes - (I/S) DR Current income tax expense o (BS) CR Income tax payable xxx xxx Future income tax expense - (I/S) DR Future income tax expense xxx o (BS) CR Future income tax liability OR (BS) DR Future income tax asset xxx o (I/S) CR Future income tax expense xxx xxx **First one is recording a potential future expense, while second is a reversal of expense ** Continuity Schedule (following in order - horizontally) ** Calculate each account independently. Ex: Fixed assets - Depreciation, Pension contribution, Warranty costs should each be calculated as separate accounts on the same schedule - - - - Accounting Basis o Book value Tax Basis o Taxable amounts o Ex: pg 43 Depreciation is a different number because 140 was the amount that was taxed, not the 120 Temporary difference o Difference between accounting basis and tax basis o Accounting basis - Tax basis o Tip: + difference assets = positive number (no brackets) - difference assets = negative number (brackets needed) + difference liabilities = negative number (brackets needed) - difference liabilities = positive number (no brackets) Tax/Deductible o Put this to keep track of how much deductive and taxable FIT there is o Assets temp basis > 0 , taxable o Liability temp basis > 0, deductible o Vice versa Tax rate o Given to you Future tax liability - ending balance o Temp difference X tax rate Future tax liability - opening balance o Beginning FIT balance - FIT Expense o Ending FIT - Beginning FIT ** Total FIT expense of current year = total temporary difference X tax rate - FIT expense of previous year (beginning balance) *method to check your totals are correct Net Income - - Income before income taxes Less Income tax expenses o Current o Future Total = Net Income Balance Sheet Liabilities - Current Liabilities o Income Tax Payable Long-term liabilities o Future Income Tax Payable (liabilities) Cash Flow - Net Income Less: Non-cash items o Depreciation o FIT Expense * Note on effective tax rate (split into 3 parts) Basis rate Non-taxable items Effect of change in tax rate Totals - - - $ A B D F Basis rate o A Take income before income tax (IBIT) X tax rate Non-taxable items o B Non-taxable items X tax rate o C Take calculated amount of B and divide it by IBIT Effect of change in tax rate o Only when there is a change in tax rate o D Change in FIT X (change in tax rate) o FIT (year 2 - 1) X Tax rate (year 1- 2) o E take D / IBIT Total (F is cash amount and G is the effective tax rate) % Tax rate C E G Accounting for Tax Loss (Loss Carryback and Carryforward) Journal Entries Current year - (BS) DR Income tax refund receivable o (I/S) CR Current income tax expense (benefit) (Loss carryback) xxx xxx Future years - Future income tax expense xxx o Future tax liability - (Future taxes - fixed assets) OR Future tax asset xxx o Future income tax expense - (Future taxes - Loss Carryforward) Income Statement xxx xxx