Income from continuing operations before income taxes $ 600,000
Gain on discontinued operations 50,000
Correction of prior year’s error in recording depreciation expense on equipment. The depreciation expense was understated in 2020 and the capital cost allowance was correctly calculated. 10,000
An unrealized holding gain on investments accounted for at fair value through other comprehensive income (FV-OCI). Assume that this will be taxable as ordinary income when it is realized 20,000
Tax rate all years 25%
1) Calculate current tax expense or benefit for Javier Inc. Also report the relevant deferred taxes.
2) Show any adjusting entry for the correction of prior year error
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