Refer to the data in Exhibit 3.4 on page 82 showing income over a 5 -year period under various methods of revenue and income recognition. Use the methods of accounting indicated below for financial statements and for tax returns. Assume an income tax rate of 40 percent. Compute income tax expense, income taxes payable, and deferred income taxes for each period. Put this information into journal entry form.

a Use the percentage of completion method on the financial statements and the completed contract method on the tax return.

b Use the cost-recovery-first method on the financial statements and the installment method on the tax return.