2023 was the first y ear of operations for Lincoln Corporation. In 2023, Lincoln reported pretax accounting income of $1,000,000, which included the following amounts; 1. Interest received on tax-exempt honds $30,000 was reported on the 2023 income statement. However, this reven de is not included in taxable income. 2. Insu ance experse of $4,000, representing one fourth of a $16,000, four year casualty and liability insurance policy that is deducted for tax purposes in its entirety in 2023 . 3. A piece of equipment costing $600,000 with a four-year useful life was acquired at the beginning of 2023. It is depreciated by the straight-line method for acoountine purposes. However, MACRS is used on the tax return. The depreciation reported on the income statement and the tax return for the fouryear period is shown below: 4. In 2023, estimated warrarty expense of $9,000 will be deductible on the tax return when actualy paid during 2024, 2025, and 2026, Estimated deductions are as follows; 5. In 2023, property was sold on an insta liment basis for $50,000, Lincoln recognizes installment income for financial reporting purposes in the year of sale. For tax purposes, install ment income is reported by the installment method when the cash is received. The scheduled collections are as follows: $25,000 in 2024 , and $35,000 in 2025 . The enacted tax cate for 2023 was 30%. Because of changes in the tax Ifgislation, the enacted tax rates for 2024,2025 and 2026 are as folow5: INSTRUCTIONS: 1. Which of the differences described in 15 above are temporary, and which are permanent? Explain your answer. 2. Prepare a schedule which reconciles the difference between pretax accounting income and taxable incorme for 2023 . In your schedule, identify each temporary difference as a future taxable amount or a future deductible arnourit, and indicate whether it will gerierate a Deferred Tax Asset \{DTA) or a Deferred Tax Liability (DTL). 3. Prepare the appropriate joumal entry for 2023 for tax expense, deferred tax assets, deferred tax liabilities and taxes payable. Show computation 5. 4. Indicate how the 2023 deferred tax amounts should be classified and reported on the 2023 balance sheet. 2023 was the first y ear of operations for Lincoln Corporation. In 2023, Lincoln reported pretax accounting income of $1,000,000, which included the following amounts; 1. Interest received on tax-exempt honds $30,000 was reported on the 2023 income statement. However, this reven de is not included in taxable income. 2. Insu ance experse of $4,000, representing one fourth of a $16,000, four year casualty and liability insurance policy that is deducted for tax purposes in its entirety in 2023 . 3. A piece of equipment costing $600,000 with a four-year useful life was acquired at the beginning of 2023. It is depreciated by the straight-line method for acoountine purposes. However, MACRS is used on the tax return. The depreciation reported on the income statement and the tax return for the fouryear period is shown below: 4. In 2023, estimated warrarty expense of $9,000 will be deductible on the tax return when actualy paid during 2024, 2025, and 2026, Estimated deductions are as follows; 5. In 2023, property was sold on an insta liment basis for $50,000, Lincoln recognizes installment income for financial reporting purposes in the year of sale. For tax purposes, install ment income is reported by the installment method when the cash is received. The scheduled collections are as follows: $25,000 in 2024 , and $35,000 in 2025 . The enacted tax cate for 2023 was 30%. Because of changes in the tax Ifgislation, the enacted tax rates for 2024,2025 and 2026 are as folow5: INSTRUCTIONS: 1. Which of the differences described in 15 above are temporary, and which are permanent? Explain your answer. 2. Prepare a schedule which reconciles the difference between pretax accounting income and taxable incorme for 2023 . In your schedule, identify each temporary difference as a future taxable amount or a future deductible arnourit, and indicate whether it will gerierate a Deferred Tax Asset \{DTA) or a Deferred Tax Liability (DTL). 3. Prepare the appropriate joumal entry for 2023 for tax expense, deferred tax assets, deferred tax liabilities and taxes payable. Show computation 5. 4. Indicate how the 2023 deferred tax amounts should be classified and reported on the 2023 balance sheet