The following information is available for the first three yearsof operations for Wildhorse Company: 1. Year Taxable Income 2020$610,000 2021 460,000 2022 510,000 2. On January 2, 2020, heavyequipment costing $710,000 was purchased. The equipment had a lifeof 5 years and no salvage value. The straight-line method ofdepreciation is used for book purposes and the tax depreciationtaken each year is listed below: Tax Depreciation 2020 2021 20222023 Total $234,300 $319,500 $106,500 $49,700 $710,000 3. OnJanuary 2, 2021, $333,000 was collected in advance for rental of abuilding for a three-year period. The entire $333,000 was reportedas taxable income in 2021, but $222,000 of the $333,000 wasreported as unearned revenue at December 31, 2021 for bookpurposes. 4. The enacted tax rates are 20% for all years.
a-Prepare a schedule comparing depreciation for financialreporting and tax purposes.
b-Prepare a schedule of future taxable and (deductible) amountsat the end of 2021.
c-Prepare a schedule of the deferred tax (asset) and liabilityat the end of 2021.
d-Compute the net deferred tax expense (benefit) for 2021.
f-Prepare the journal entry to record income tax expense,deferred income taxes, and income tax payable for 2021.
