17. In 2022 Lammer Co. had income before income taxes (GAAP based) of $2,100,000. Included in determining that $2,100,000 of pre-tax income, were the following items: Lammer had disallowed deductions during the year of $30,000 which were recognized as an expense on its income statement Lammer earned tax-exempt income of $10,000 that was recognized as revenue on its income statement Lammer recognized a contingent loss of $150,000 on its income statement because the company believes it is probable it will have to pay that amount in 2023 to settle an ongoing lawsuit. This amount is not deductible for tax purposes until paid. This temporary difference of $150,000 is expected to reverse fully in 2023. Lammer recognized $400,000 in revenue on in its income statement which was not included on its tax return because the sales price will be paid in equal installments over the next four years. The $400,000 temporary difference will reverse as follows as cash payments are received and the receipts are included in taxable income: o 2023 - $50,000 o 2024 - $50,000 o 2025 - $50,000 o 2026 - $250,000 Tax rates for 2022 and 2023 are 20%. Tax rates for 2024 and all future years are 30%.

a) What is Lammers taxable income for 2022?

b) What is Lammers current income tax expense for 2022?

c) What amount, if any, of Deferred Tax Asset should Lammer report on its 2022 Balance Sheet?

d) What amount, if any, of Deferred Tax Liability should Lammer report on its 2022 Balance Sheet?

e) Prepare the journal entry for Lammer to recognize income tax expense for 2022. Assume that there were no opening balances in Lammers deferred tax asset or deferred tax liability accounts.

f) Prepare the bottom portion of Lammers 2022 income statement, beginning with Income before Income Taxes ($2,100,000)