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3 Problem 4 DTD-deferred revenue] ABC's tax accounting methods and GAAP accounting methods are the same except for the method used to account for advance payments from customers. Per GAAP, ABC defers recognition of such advance payments (debit cash, credit unearned revenue) and recognizes the revenue as it satisfies the related performance obligation (debit uncarned revenue, credit revenue). Per tax rules, ABC is taxed on the ndvance payments when received without regard to whether the performance obligation has been satisfied. B ABC reports pretax GAAP earnings of S200,000 for the 12 months ended December 31, 2020. ABC's 3 deferred revenue (relating to advance payments from customers) was $300,000 at December 31, 2019 and 0 $250,000 at December 31, 2010. Embedded in pretax GAAP earnings is $30,000 paid for life insurance 11 premiums on corporate officers (ABC is the beneficiary of the insurance policies). 12 13 At December 31, 2019, the company believed it was more likely than not that the entire 12/31/2019 deferred tax asset would be realized. At December 31, 2020, the company believes it is "more likely than 24 not that only 50% of the 12/31/2020 deferred tax asset will be realized. 15 16 Required 17 1. Prepare the entries needed to record current and deferred income taxes at December 31, 2020. Assume 18 21% corporate tax rate. 19 20 21 22 Enter your entries below. Choose the account from the drop-down list in the yellow cell. Enter the amount of the entry in the green box 23 24 Account Debit Credit 25 26 27 28 1 1 1 1 1 30 31 32 Enter your answer to the following question in the green box 33 What amount of net income will be reported on the 2020 income statement? 35 15 > E F G 1 Columns 2 A 3 B 4 C 5 D Columni Deferred income tax asset (Bal. Sht) Deferred income tax asset valuation allowance (Bal. Sht) Deferred income tax liability (Bal Sht) Income tax payable (Bal.Sht) Liability for uncertain tax position (Bal. Sht) Income tax expense (Inc. Stmt) 7 9 10 12 14