i. Year Taxable Income Tax Rate
2017 $380,000 35%
2018 433,000 30%
2019 465,000 30%
2020 492,000 30%
ii. On January 1, 2017, heavy equipment costing $1,000,000 was purchased. The equipment had a life of 4 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below:
2017 2018 2019 2020 Total
$330,000 $450,000 $150,000 $70,000 $1,000,000
iii. On January 1, 2018, $480,000 was collected in advance for rental of a building for a three-year period. The entire $480,000 was reported as taxable income in 2018, but $320,000 of the $480,000 was reported as unearned revenue at December 31, 2018 for book purposes.
Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2017. (4 points)
Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2018. (4 points)
Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2019. (4 points)
 Please note: book purposes is same as financial reporting purposes
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