A company reports taxes under ASPE future /deferred income taxes method. Following is a schedule of taxable and deductible amounts that will arise in the future as a result of existing temporary differences.

	Current Year
	2017	2018	2019	2020	2021
Taxable income	$100,000
Taxable Amounts		$180,000	$180,000	$180,000	$180,000
Deductible amounts				$1,120,000
Tax Rate	25%	26%	26%	28%	28%

Required:

Explain the concept of future taxable amounts and future deductible amounts as shown in the schedule.

Determine the balance of the deferred tax asset and deferred tax liability accounts on the December 31, 2017 balance sheet. Assuming all temporary differences originated in 2017, prepare the journal entry to recognize income tax expense for 2017.