The records of Calib Corporation provided the following summarized data for 2011 and 2012:

a. Calib is subject to an income tax rate of 35 percent. Assume that 80 percent of the income taxes payable are paid in the current year and 20 percent on February 28 of the next year.

b. The temporary differences resulted from the following:
i. The 2012 expenses include an amount of \(\$ 8,000\) that must be deducted only in the 2011 tax return.
ii. The 2012 revenues include an amount of \(\$ 6,000\) that was taxable only in 2013 .

c. The taxable income shown in the tax returns was \(\$ 72,000\) for 2011 and \(\$ 87,000\) for 2012.
\section*{Required:}
1. For each year compute

(a) the income taxes payable and

(b) the deferred income taxes. Identify whether the deferred income tax amounts are assets or liabilities. Explain.
2. Prepare the journal entry for each year to record income taxes payable, deferred income taxes, and income tax expense.
3. Show the tax-related amounts that should be reported each year on the income statement and the statement of financial position.
4. As a financial analyst, would you evaluate differently a deferred income tax liability compared with income taxes currently payable?

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Year-End December 31 Income statement Revenues Expenses (excluding income tax) Profit before income taxes. 2011 2012 $210,000 $218,000 130,000 133,000 $ 80,000 $ 85,000