(ACCOUNTING 302)

Zurich Inc. reports pretax financial income of $70,000 in 2020. The following items cause taxable income to be different than pretax financial income. The tax rate is 20%. 1. Rent collected on the tax return is greater than rent recognized on the income statement by $22,000, causing a temporary difference. 2. Fines for pollution appear as an expense of $11,000 on the income statement but are not allowed as a tax deduction in the tax return, causing a permanent difference.

a. Compute income tax payable for 2020. (please show your calculation step by step, 4 points) b. Prepare the journal entry to record income tax for 2020. (please show your work with details of how you work out the numbers for the journal entry, 6 points).