Stadia Ltd$.,$ a public corporation that follows IFRS, is in the process of preparing its financial statements for its second year of operations ended December $31,2023.$ Pertinent information follows:

Accounting income before tax is $$1,500,000.$ Included in this amount is $$100,000$ of Other Comprehensive Income arising from unrealized gains on investments.

Depreciation on property, plant, and equipment $($PPE$)$ in the books is $$150,000$ and CCA claimed will be $$250,000.$ At the beginning of the year, the book value of the PPE was $$1,200,000.$

The company sells a product with a $2-$year warranty. The estimated warranty cost is $$100$ per unit. At the beginning of $2023,$ the balance in the warranty liability account was $$400,000.$ During $2023,$ the company sold $5,000$ units of the product and paid out $$200,000$ in warranty costs. It expects that the adjusted warranty liability balance at the end of $2023$ to be spent evenly over $2024$ and $2025.$ At the end of $2022,$ the company also expected the adjusted warranty liability amount to be paid evenly over $2023$ and $2024.$

The accounting income before tax included $$25,000$ in golf dues expenses, none of which can be deducted for income tax purposes.

At the beginning of $2023,$ the enacted income tax rate went down from $40\%$ to $35\%.$

On December $31,2023,$ the company received three years advance rent income $($for $2024$ through $2026)$ of $$90,000,$ which was recorded as unearned revenue for book purposes, but which must be reported as $2023$ revenue for income tax purposes.

Instructions

a$)$ Reconcile accounting income before tax to taxable income for $2023.$

b$)$ Prepare the required income tax related journal entries for $2023.$

c$)$ Prepare the bottom section of the $2023$ income statement, beginning with income before income taxes.