[nicolevern]

Hi,I am currently preparing for the midterm exam and was doing a question that a
Friend recommended. However, I don't know the answer and am having
Difficulties with it. The question is as follows:

North River Corporation purchased equipment very late in 2008. The company uses
The revaluation method for this equipment. Based on the capital cost allowances
Rates provided in the Income Tax Act, North River Corporation claimed CCA on its
2008 tax return but did not record any amortization as the equipment had not yet
Been put into use. This temporary difference will reverse and create taxable
Amounts of $25,000 in 2009, $30,000 in 2010, and $40,000 in 2011. North River's
Accounting income for 2008 is $200,000 and the tax rate is 40% for all years.
There are no future income tax accounts at the beginning of 2008.

Assume now that the company reports accounting income of $180,000 in each of
2009 and 2010, and no other temporary differences are identified. In addition,
Assume that North River Corporation was advised on Dec 31, 2010 that the
Enacted rate for 2010 and subsequent years is 35%. Finally, at Dec 31, 2010,
The revaluation surplus adjustment (before tax) was determined to be $80,000
And the asset has a remaining life of 10 years. The timing differences reversed
In 2009 and 2010 exactly as expected.

Prepare the journal entries to record income taxes for 2008, 2009, and 2010.
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Does the surplus adjustment impact the income tax expense or my answer? If so,
How? I've attached my work for the problem. Did I do it right?

Thanks!