Accounting : Income from continuing operations before income taxes $ 600,000

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%

Instructions

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