Assume the following facts for RTY Corporation for Year 1.

RTY recorded $2,300 of book income.

At the end of the year, RTY had accumulated depreciation for book purposes of $10,000 and accumulated depreciation for tax purposes of $15,000. As of the beginning of the year, the accumulated depreciation balances were $8,000 and $12,000, respectively.

RTY paid premiums for officer life insurance of $500. The premium is not deductible for tax purposes since the payout upon death of an officer will not be taxable income.

RTY established a warranty reserve of $1,500.

RTYs reserve for obsolete inventory decreased from $3,750 to $1,950.

RTY files a single state return where all of its taxable income is subject to an 8% state income tax rate.

Assume a federal income tax rate of 21 percent.

a. What are RTY's permanent items?

b. What are RTY's changes in temporary differences?

c. What is RTY's current tax liability (Federal and State)?

d. What is the journal entry to record RTY's current tax liability?

e. What is the temporary difference related to depreciation at the end of Year 1? Is it a deductible temporary difference or a taxable temporary difference?

f. What are the total deferred tax assets and liabilities at year-end? Please list each.

g. What is the journal entry to book deferred tax expense?

h. What is the total provision for income tax?