Swifty Enterprises Ltd., a private company following ASPE earned accounting income before taxes of $1,721,000 for the year ended December 31, 2023. During 2023, Swifty paid $231.000 for meals and entertainment expenses. In 2020, Swifty's tax accountant made a mistake when preparing the company's income tax return. In 2023, Swifty paid $18,000 in penalties related to this error. These penalties were not deductible for tax purposes. Swifty owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Swifty rented the building to SPK Inc. for two years at $252,000 per year. SPK paid the entire two years' rent in advance. Swifty used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $398,000. For tax purposes, Swifty claimed the maximum capital cost allowance of $623,000. Swifty began to sell its products with a two-year warranty against manufacturing defects in 2023 to match a warranty introduced by its main competitor. In 2023, Swifty accrued $587,000 of warranty expenses: actual expenditures for 2023 were $283,000 with the remaining $304,000 anticipated in 2024. In 2023 Swift rubinch to a 36% in

Sunland Services Ltd. follows ASPE and had earned accounting income before taxes of $520,000 for the year ended December 31, 2023. During 2023, Sunland paid $77,000 for meals and entertainment expenses. In 2020, Sunland's tax accountant made a mistake when preparing the company's income tax return. In 2023, Sunland paid $10,500 in penalties related to this error. These penalties were not deductible for tax purposes. Sunland owned a warehouse building for which it had no current use, so the company chose to use the building as a rental property. At the beginning of 2023, Sunland rented the building to Trung Inc. for two years at $64,500 per year. Trung paid the entire two years' rent in advance. Sunland used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $286,200. For tax purposes, Sunland claimed the maximum capital cost allowance of $431,400. This asset had been purchased at the beginning of the year for $3,004,400. In 2023, Sunland…

Pearl Inc. incurred a net operating loss of $455,000 in 2020. The tax rate for all years is 20%. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years. Prepare all the journal entries necessary at the end of 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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