3. Zenon Corp. began business on January 1, 2013. Its pretax financial income for the first 2 years was as follows: 2013 $240,000 2014 560,000 The following items caused the only differences between pretax financial income and taxable income. In 2013, the company collected $180,000 of rent; of this amount, $60,000 was earned in 2013; the other $120,000 will be earned equally over the 20142015 period. The full $180,000 was included in taxable income in 2013. 2. The company pays a $10,000 fine for pollution. 3. In 2014, the company terminated a top executive and agreed to $90,000 of severance pay. The amount will be paid $30,000 per year for 20142016. The 2014 payment was made. The $90,000 was expensed in 2014. For tax purposes, the severance pay is deductible as it is paid. 4. The company pays insurance premiums for its key officers of $8000 in 2014 and 2015. Although not tax deductible, the company expenses the premiums for book purposes. The enacted tax rates existing at December 31, 2013 are: 2013 35% 2015 45% 2014 40% 2016 45% Instructions (a) Determine taxable income for 2013 and 2014. (4 marks) (b) Determine the deferred income taxes at the end of 2013, and prepare the journal entry to record income taxes for 2013. (6 marks) (c) Prepare a schedule of future taxable and (deductible) amounts at the end of 2014. (2 marks) (d) Prepare a schedule of the deferred tax (asset) and liability at the end of 2014. (3 marks) (e) Compute the net deferred tax expense (benefit) for 2014. (2 marks) (f) Prepare the journal entry to record income taxes for 2014. (3 marks)