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Prepare the journal entries to record current and future income taxes for 2023 Windsor Enterprises Ltd., a private company following ASPE earned accounting income before
Prepare the journal entries to record current and future income taxes for 2023
Windsor Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,714,000 for the year ended December 31, 2023. During 2023, Windsor paid $223,000 for meals and entertainment expenses. In 2020, Windsor's tax accountant made a mistake when preparing the company's income tax return. In 2023, Windsor paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Windsor owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023 , Windsor rented the building to SPK Inc. for two years at $255,000 per year. SPK paid the entire two years' rent in advance. Windsor used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $406,000. For tax purposes, Windsor claimed the maximum capital cost allowance of $631,000. Windsor began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Windsor accrued $591,000 of warranty expenses: actual expenditures for 2023 were $283,000 with the remaining $308,000 anticipated in 2024 . In 2023 , Windsor was subject to a 35% income tax rate. During the year, the federal government announced that tax rates would be decreased to 33% for all future years beginning January 1,2024 . Calculate taxable income and the amount of current income tax expense for 2023. Taxable income $ Income taxes payable $Step by Step Solution
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