At December 31, 2020 Company B had one temporary difference (related to depreciation) that

resulted in a deferred tax asset of $ 300,000 on its balance sheet. At December 31, 2021,

Company B has four temporary differences.

Details on the four temporary differences:

Net book value of fixed assets for accounting purposes is $ 500,000 more than the tax

value. This will reverse by $ 100,000 in 2022, $ 250,000 in 2023 and $ 150,000 in 2024.

Royalties of $ 600,000 were collected in advance of being earned. They are taxed when

received in 2021 but will not be included in accounting income until 2022.

Various expenses totaling $ 500,000 have been accrued for accounting but are not

deductible for tax purposes until paid. $ 200,000 of this is to be paid in 2022 and

$ 300,000 to be paid in 2023.

Profit on instalment sales were recognized for accounting as earned in 2021 for a total of

$ 400,000. However, they are not taxed until the cash is received which is scheduled to

be $ 100,000 in 2022 and $ 300,000 in 2023.

The tax rate for 2021 and previous years is 40%. The rate for 2022 will be reduced to 34%, and

will be further reduced to 30% for 2023 and 2024. Assume the future rates are known at the end

of 2021.The Company has income taxes of $ 300,000 due per the 2021 current tax return. There

are no permanent differences and no additions or disposals of fixed assets in 2021.

Required:

What is the Accounting Income and Taxable income for Company B.