Fellows Inc. started operations on 1 January 20X8 and purchased $2,000,000 of equipment. The income tax rate was 40% in 20X8 and 38% in 20X9. The following is information related to 20X8 and 20X9:

Required:
1. Prepare all income tax journal entries for 20X8 and 20X9.
2. What are the deferred tax balances on the statement of financial position in 20X8 and 20X9?

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Accounting earnings before income tax Golf club dues Accrued warranty costs Warranty costs Depreciation expense on equipment Capital cost allowance 20X8 $550,000 10,000 50,000 40,000 200,000 300,000 20X9 $820,000 12,000 120,000 90,000 200,000 250,000