Thank you again for previously calculating DBT Inc's tax return last month, however due to a significant amount of adjustments we require your help once again. Please see the information below and our requirements. D.B.T. Inc Income Statement For the Year Ended December 31, 2021 Revenue Service Revenue Dividend Revenue Life Insurance Claim Received 998,000 80,000 99,000 Total Revenue 1,177,000 Expenses 100,000 Depreciation Expense Office Expense Meals and Entertainment Expense 36,000 30,000 35,000 50,000 46,000 10,000 Advertising Expense Rent Expense Litigation Expense Life Insurance Premiums Paid Salary & Wage Expense Warranty Expense Total Expenses Income from Operations 315,000 65,000 687,000 490,000 Additional Information: 1. DBT uses IFRS. It has an income tax rate of 25%. The dividend revenue represents dividends received from Canadian corporations (non-taxable). 2. During the year warranty expense of $65,000 was recorded. $30,000 of this amount was paid in cash during 2021. This is the first year DBT offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $900,000 on January 1, 2020. These assets are being depreciated on a straight-line basis over nine years with no residual value. For tax purposes the assets are classified as Class 8, 20%. This PPE is considered eligible equipment" for purposes of the Accelerated Investment Incentive (the AII") (under the AII. instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). This rate was used for 2020. 4. DBT pays for life insurance policies for its top executives. During 2021, one of the executives died, and the company received a payment of $99,000 from the life insurance company 5. On July 1. DBT was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $46,000. 6. On November 15, $70,000 was received from a customer for three months of service, beginning on November 15. One half of this amount was earned and included in revenue for 2021. Advance payments are included in taxable income when the cash is received. 7. On December 1, one of the company executives received a speeding ticket for $500. The company paid the ticket for the executive and recorded the cost as an office expense. Required: a) Calculate taxable income and taxes payable for 2021 (show all calculations including the schedule) (9 marks). b) Prepare the journal entries to record 2021 income taxes (current and deferred) (Hint: Remember to record the change for DTA/DTL) (2.5 marks). Thank you again for previously calculating DBT Inc's tax return last month, however due to a significant amount of adjustments we require your help once again. Please see the information below and our requirements. D.B.T. Inc Income Statement For the Year Ended December 31, 2021 Revenue Service Revenue Dividend Revenue Life Insurance Claim Received 998,000 80,000 99,000 Total Revenue 1,177,000 Expenses 100,000 Depreciation Expense Office Expense Meals and Entertainment Expense 36,000 30,000 35,000 50,000 46,000 10,000 Advertising Expense Rent Expense Litigation Expense Life Insurance Premiums Paid Salary & Wage Expense Warranty Expense Total Expenses Income from Operations 315,000 65,000 687,000 490,000 Additional Information: 1. DBT uses IFRS. It has an income tax rate of 25%. The dividend revenue represents dividends received from Canadian corporations (non-taxable). 2. During the year warranty expense of $65,000 was recorded. $30,000 of this amount was paid in cash during 2021. This is the first year DBT offers warranties on services rendered. 3. Property, plant, and equipment was purchased for $900,000 on January 1, 2020. These assets are being depreciated on a straight-line basis over nine years with no residual value. For tax purposes the assets are classified as Class 8, 20%. This PPE is considered eligible equipment" for purposes of the Accelerated Investment Incentive (the AII") (under the AII. instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). This rate was used for 2020. 4. DBT pays for life insurance policies for its top executives. During 2021, one of the executives died, and the company received a payment of $99,000 from the life insurance company 5. On July 1. DBT was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is probable that a settlement will eventually be reached for $46,000. 6. On November 15, $70,000 was received from a customer for three months of service, beginning on November 15. One half of this amount was earned and included in revenue for 2021. Advance payments are included in taxable income when the cash is received. 7. On December 1, one of the company executives received a speeding ticket for $500. The company paid the ticket for the executive and recorded the cost as an office expense. Required: a) Calculate taxable income and taxes payable for 2021 (show all calculations including the schedule) (9 marks). b) Prepare the journal entries to record 2021 income taxes (current and deferred) (Hint: Remember to record the change for DTA/DTL) (2.5 marks)