4. Tomorrow Publications reported pretax accounting income in 2016, 2017, and 2018 of $80 million, $115 million, and $105 million, respectively. The 2016 income statement does not include $20 million of magazine subscriptions received that year for one- and two-year subscriptions. The subscription revenue is reported for tax purposes in 2016. The revenue will be recognized in 2017 ($15 million) and 2018 ($5 million). The income tax rate is 40% each year. 2017 115 (15) 2018 105 3 2016 Pre-accounting Income 80 Subtract: Subscription 0 Revenue from IS Add: Subscription Revenue from tax 20 return 100 100 100 Taxable Income Return