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: 1. Interest revenue on municipal bonds of $10,000 was included in the pretax accounting income. However, this revenue is not taxable. 2. 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: Depreciation YearIncome Statement 2019 2020 50,000 2021 2022 Tax Return $198,000 264,000 90,000 48,000 Difference $(48,000) (114,000) 60,000 102,000 S-0- $150,000 150,000 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. Warranty Year Income Statement 2019 2020 2021 Tax Return $-0- 5,000 7000 Difference $12,000 (5,000) (7000) S-0- $12,000 4. 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. 5. 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 scheduled collections are as follows: $10,000 in 2020, $15,000 in 2021, and $25,000 in 2022 The enacted tax rate for 2019 was 30%. The estimated tax rates for 2020-2022 are as follows 2020 30% 2021 40% 2022 40% INSTRUCTIONS 1. Which of the differences described in 1-5 above are temporary, and which are permanent? Explain your answer. Prepare a schedule which reconciles the difference between pretax accounting income and taxable income for 2019. 2. 3. Prepare the appropriate journal entry for 2019 4. Show how the 2019 deferred tax amounts should be classified and reported on the 2019 balance sheet