The Following Information Relates to the Accounting Income for Saskatchewan

Question 59
Essay

The following information relates to the accounting income for Saskatchewan Real Estate Company (SREC)for the current year ended December 31. img During the year,the company sold one of its buildings with carrying value of $780,000 for proceeds of $1,000,000,resulting in an accounting gain of $220,000.This gain has been included in the pre-tax income figure of $670,000 shown above.For tax purposes,the acquisition cost of the building was $870,000.For purposes of CCA,it is a Class 1 Asset,which treats each building as a separate class.The undepreciated capital cost (UCC)on the building at the time of disposal was $660,000. Required: Prepare the journal entries to record income taxes for SREC.