A plant asset purchased by Krest Inc. for $200,000 late in 2018 is to be depreciated as follows. Year Tax Depreciation Book Depreciation 2019 $80,000 $40,000 2020 60,000 40,000 2021 40,000 40,000 2022 20,000 40,000 2023 40,000 $200,000 $200,000 In 2020, taxable income was $900,000 and the tax rate is 25%. Future enacted tax rates are as follows: 2021: 25%; 2022: 30%; and 2023: 30%. The deferred tax liability balance on January 1, 2020, was $10,000. Required a. Prepare a schedule to compute the deferred tax liability as of December 31, 2020. 2021 2022 2023 Total Reversal of difference between GAAP and tax bases $ Tax rate Deferred tax liability 25% 30% 30% b. Calculate the tax basis of the plant asset on December 31, 2020, and its reported amount in the financial statements. Tax basis of plant asset, Dec 31, 2020 $ GAAP basis of plant asset, Dec 31, 2020 $ c. Prepare the journal entry to record income tax expense in 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Account Name Dr. Cr. Date Dec 31, 2020