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1. Deferred Taxes

Aylmer has a corporate tax rate of 25%.

There are two differences that have been identified:

Assume that CCA (Capital Cost Allowance) for tax purposes was $23,000 more that straight-line depreciation calculated. Included in administrative expenses are golf club dues that total $12,250.

There was no deferred tax liability or asset in Y5 or prior years.

In the Excel spreadsheet, see the tab labelled Deferred Taxes to make any calculations, including an amortization schedule, to support journal entries. Note that there are assumptions in that tab follow the instructions in the tab carefully.

a) Calculate taxable income for Y6:
		Accounting Income	420,000	ASSUME THIS IS CORRECT!
b) Calculate the deferred tax asset or liability at Dec 31, Y6
				BV	deductible	balance
			tax	asset	(taxable)	tax	DT Asset
		Account	base	(liability)	difference	rate	(DT Liab)
c) Prepare any adjusting entries that would be required related to income tax for Y6.

Please make any required calculations and prepare journal entries

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