2019 was the first year of operations for Griffin Corporation. In 2019, Griffin reported pretax accounting income of $800,000, which included the following amounts Interest revenue on municipal bonds of $10,000 was included in the pretax accounting income. However, this revenue is not taxable 1. A piece of equipment with a four-year useful life was acquired at the beginning of 2019. It is depreciated by the straight-line method for accounting purposes. However, MACRS is used on the tax return. The depreciation reported on the income statement and the tax return for the four-year period is shown below 2. Depreciation Year Income Statement 2019 2020 2021 2022 $150,000 150,000 150,000 150,000 $600,000 Tax Return $198,000 264,000 90,000 48,000 $600,000 Difference $(48,000) (114,000) 60,000 102,000 Estimated warranty expense of $12,000 will be deductible on the tax return when actually paid during the next two years. Estimated deductions are as follows 3. Warran Year Income Statement 2019 2020 2021 Difference $12,000 (5,000) (2.000) Tax Return $12,000 $-0- 5,000 Z000 12 12 Insurance expense of $9,000, representing one-fourth of a $36,000, four-year casualty and liability insurance policy that is deducted for tax purposes in its entirety in 2019 4. In 2019, property was sold on an installment basis for $50,000. Griffin recognizes installment income for financial reporting purposes in the year of sale. For tax purposes, installment income is reported by the installment method when the cash is received. The 5