Question 3 Concord 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. 2. 3. 4. Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $19,600. Rent revenue reported on the tax return is $29,400 higher than rent revenue reported on the income statement. Non-deductible fines appear as an expense of $18,300 on the income statement. Concord's tax rate is 30% for all years and the company expects to report taxable income in all future years. Concord reports under IFRS. (a) your answer is correct. Calculate taxable income and income tax payable for 2020. Taxable income for 2020 143,100 Income tax payable for 2020 T 42,930 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 1 of 3 used (b) Your answer is correct. Calculate any deferred tax balances at December 31, 2020. Deferred tax Tasset 2,940 SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 1 of 3 used Your answer is correct. Prepare the journal entries to record income taxes for 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Year Account Titles and Explanation Debit Credit 2020 Current Tax Expense 42,930 T 42,930 | Income Tax Payable T. (To record current tax expense) 2020 TDeferred Tax Asset 8,820 | Deferred Tax Benefit 2,940 5,880 I Deferred Tax Liability (To record deferred tax benefit) SHOW LIST OF ACCOUNTS SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the income tax expense section of the income statement for 2020, beginning with the line "Income before income tax." Concord Inc. (Partial) Income Statement For the Year Ended December 31, 2020 V Tincome Before Income Tax 115,000 T Income Tax Expense - Current 42,930 T Income Tax Expense - Deferred (Benefit) 2,940 39,990 TNet Income / (Loss) 75,010 SHOW LIST OF ACCOUNTS SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 2 of 3 used (e) Reconcile the statutory and effective rates of income tax for 2020. (Round percentages to 1 decimal place, e.g. 25.7%.) Divided by Accounting Income @ 30% Accounting Income 115,000 $ Non-Deductible Fines 18,300 % % SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Attempts: 0 of 3 used