The Following Information Relates to the Accounting Income for Withering

question 11

Essay

The following information relates to the accounting income for Withering Press Company (WPC)for the current year ended December 31.
$\begin{array}{ll}\text { Income before taxes } & \$ 300,000 \\\\\text { Dividend income-non taxable } & 20,000 \\\\\text { Depreciation } & 120,000 \\\\\text { CCA } & 100,000 \\\\\text { Impairment (see additional info below) } & 150,000 \\\\\text { Tax rate } & 40 \%\end{array}$ The company had purchased land some years ago for $600,000.Recently,it was discovered that this land is contaminated by industrial pollution.Because of the soil remediation costs required,the value of the land has decreased.For tax purposes,the impairment loss is not currently deductible.In the future when the land is sold,half of any losses is deductible against taxable capital gains (ie.,the other half that is not taxable or deductible is a permanent difference).
The deferred income tax liability account on January 1 had a credit balance of $45,000.This balance is entirely related to property,plant,and equipment (PPE).
Requirement:
Prepare the journal entries to record income taxes for WPC.

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Definitions:

Talk Too Much

The act of speaking excessively or beyond what is necessary, often without considering the listener's interest or patience.

Critical Thinking

The objective analysis and evaluation of an issue or situation in order to form a judgment.

Cultural Awareness

Understanding and being sensitive to different cultural practices, beliefs, and values.

Expressing Empathy

The act of understanding, being aware of, and vicariously experiencing the feelings, thoughts, and experience of another.