Week 7 Homework: Chapter 18 Press F11o exit full screen Question 4 of 5 > -/1 E Bridgeport Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company obtained a contract to construct a rood for the municipality of Cochrane West, and it is estimated that the project will be completed over a three-year period starting in June 2020. Bridgeport uses the percentage-of-completion method of recognizing revenue on its long term construction contracts. For tax purposes, and in order to postpone the tax on such revenue for as long as possiblc, Bridgeport uses the completed-contract method allowed by the CRA. For the second year of operations, Bridgeport made progress on the construction of the road for the municipality. The account balances at December 31, 2020 and 2021, for the construction project and the accounting and tax balances of accounts related to the equipment used for construction follow: Accounts Receivable Asset/Liability (net of billings to date of $796,000 and $400,000) Revenue from Long-Term Contracts Construction Expenses Equipment Accumulated Depreciation-Fquipment Undepreciated Capital Cost 2021 $111.000 120.000 416,000 410,000 1.100,000 452.000 619.000 2020 $320,000 100,000 500,000 350,000 1,100,000 172,000 988,000 Bridgeport's tax rate was 25% in 2020 and 2021. The cracted tax rate for 2022 and subsequent years was reduced to 20% on September 15, 2021. Income before income tax for the year ended December 31, 2020, was $195,000 and for December 31, 2021, was $128.000. Bridgeport reports under IFRS. Prepare the journal entry to record the effect of the change in the enacted tax rate. (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 for the amounts.) Account Titles and Explanation Debit Credit Date September 15, 2021 e Textbook and Media Week 7 Homework Chapter 18 Question 4 of 5 Calculate any deferred tax balances at December 31, 2021 Deferred tax eTextbook and Media Calculate taxable income and income tax payable for 2021 $ Taxable income Income tax payable $ eTextbook and Media Prepare the journal entries to record income taxes for 2021. (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 for the amounts) Account Titles and Explanation Debit Credit (To record current tax expense) (To record deferred tax expertise) e Textbook and Media Week 7 Homework Chapter 18 Question 4 of 5 > Prepare a comparative income statement for 2020 and 2021, hrginning with the line "Income hefore income tax". Bridgeport Tar and Gravel Ltd. Comparative Income Statement (Partial) 2021 2020 $ $ eTextbook and Media Provide the comparative SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020, and 2021 Bridgeport Tar and Gravel Ltd. Comparative Statement of Financial Position (Partial) 2021 2020 $ $ e Textbook and Media Provide the mparative balance sheet presentation for a resulting deferred tay balance sheet accounts at lorember 31 e Textbook and Media Provide the comparative balance sheet presentation for any resulting deferred tax balance sheet accounts at December 31, 2020 and 2021, assuming Bridgeport follows ASPE. Bridgeport Tar and Gravel Ltd. Comparative Balance Sheet (Partial) 2021 2020 $ $ e Textbook and Media Attempts: 0 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2 Week 7 Homework: Chapter 18 Press F11o exit full screen Question 4 of 5 > -/1 E Bridgeport Tar and Gravel Ltd. operates a road construction business. In its first year of operations, the company obtained a contract to construct a rood for the municipality of Cochrane West, and it is estimated that the project will be completed over a three-year period starting in June 2020. Bridgeport uses the percentage-of-completion method of recognizing revenue on its long term construction contracts. For tax purposes, and in order to postpone the tax on such revenue for as long as possiblc, Bridgeport uses the completed-contract method allowed by the CRA. For the second year of operations, Bridgeport made progress on the construction of the road for the municipality. The account balances at December 31, 2020 and 2021, for the construction project and the accounting and tax balances of accounts related to the equipment used for construction follow: Accounts Receivable Asset/Liability (net of billings to date of $796,000 and $400,000) Revenue from Long-Term Contracts Construction Expenses Equipment Accumulated Depreciation-Fquipment Undepreciated Capital Cost 2021 $111.000 120.000 416,000 410,000 1.100,000 452.000 619.000 2020 $320,000 100,000 500,000 350,000 1,100,000 172,000 988,000 Bridgeport's tax rate was 25% in 2020 and 2021. The cracted tax rate for 2022 and subsequent years was reduced to 20% on September 15, 2021. Income before income tax for the year ended December 31, 2020, was $195,000 and for December 31, 2021, was $128.000. Bridgeport reports under IFRS. Prepare the journal entry to record the effect of the change in the enacted tax rate. (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 for the amounts.) Account Titles and Explanation Debit Credit Date September 15, 2021 e Textbook and Media Week 7 Homework Chapter 18 Question 4 of 5 Calculate any deferred tax balances at December 31, 2021 Deferred tax eTextbook and Media Calculate taxable income and income tax payable for 2021 $ Taxable income Income tax payable $ eTextbook and Media Prepare the journal entries to record income taxes for 2021. (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 for the amounts) Account Titles and Explanation Debit Credit (To record current tax expense) (To record deferred tax expertise) e Textbook and Media Week 7 Homework Chapter 18 Question 4 of 5 > Prepare a comparative income statement for 2020 and 2021, hrginning with the line "Income hefore income tax". Bridgeport Tar and Gravel Ltd. Comparative Income Statement (Partial) 2021 2020 $ $ eTextbook and Media Provide the comparative SFP presentation for any resulting deferred tax balance sheet accounts at December 31, 2020, and 2021 Bridgeport Tar and Gravel Ltd. Comparative Statement of Financial Position (Partial) 2021 2020 $ $ e Textbook and Media Provide the mparative balance sheet presentation for a resulting deferred tay balance sheet accounts at lorember 31 e Textbook and Media Provide the comparative balance sheet presentation for any resulting deferred tax balance sheet accounts at December 31, 2020 and 2021, assuming Bridgeport follows ASPE. Bridgeport Tar and Gravel Ltd. Comparative Balance Sheet (Partial) 2021 2020 $ $ e Textbook and Media Attempts: 0 of 3 used Submit Answer Save for Later Using multiple attempts will impact your score. 20% score reduction after attempt 2