The Following Information Relates to the Accounting Income for Withering

question 31

Essay

The following information relates to the accounting income for Withering Press Company (WPC)for the current year ended December 31. $\begin{array}{lr}\text { Income before taxes } & \$ 300,000 \\\text { Dividend income - nontaxable } & 20,000 \\\text { Depreciation } & 120,000 \\\text { CCA } & 100,000 \\\text { Impairment (æe additional info below) } & 150,000 \\\text { Taxrate } & 40 \%\end{array}$ 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).
Required:
Prepare the journal entries to record income taxes for WPC.

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Definitions:

External Variable

A factor outside the control of individuals that can affect their actions, outcomes, or a study's results, often considered in research to ensure validity.

Self-control

The ability to regulate one's emotions, thoughts, and behavior in the face of temptations and impulses.

Negative Reinforcement

A behavioral principle where the removal of an unpleasant stimulus following a behavior increases the likelihood of that behavior being repeated in the future.

Intermittent Reinforcement

A conditioning schedule where a response is only sometimes rewarded, leading to more persistent behavior than continuous reinforcement.