4. Un December 31, 2019, the Fly Company had no temporary differences that created deterre con taxes. On January 2, 2020, a new machine was purchased for $30.000. Straight-line depreciation over a four-year life (no residual value) was used for financial accounting. Depreciation expense for tax purposes was $12,000 in 2020, $8,000 in 2021. $6,000 in 2022, and $4,000 in 2023. In each year, the income tax rate was 30% and Fly Company had no other items that created differences between preta Tinancial income and taxable income. Fly reported the following pretax financial income for 2020 through 2023: 2020 2021 2022 2023 $40,000 50,000 30,000 60,000 The entry to record income taxes on December 31, 2021, would include a: a. credit to Deferred Tax Liability for $150 b. credit to Income Taxes Payable for $15,000 c. debit to Income Tax Expense for $14,850 d. debit to Deferred Tax Liability for $150 5. The Petra Company incurred the following expenses, which are reported differently for financial reporting purposes and taxable income: Estimate of bad debts expense (but not written off) Estimated product warranty costs (but not paid) $40,000 $160,000 The temporary difference(s) amount to a. $ 0 b. $ 40,000 c. $ 160,000 d. $ 200,000 6. For the year ended December 31, 2019, the Red Company reported income of $400,000 before provision for income tax. In arriving at taxable income for income tax purposes, the following differences were identified: $ 5,000 50,000 Bad debt expense (but not written off) Depreciation deducted for tax purposes in excess of depreciation for accounting purposes Income for installment sales reportable for income tax purposes in excess of income reported for financial reporting purposes 25,000 Assuming a corporate income tax rate of 30%, Red's current income tax liability as of December 31, 2019, is a. $99,000 b. $106,500 c. $114,000 d. $220,000