At the beginning of 2021, the Eastman Company purchased equipment for $800,0000. The

economic life and salvage value for the equipment is 10 years and zero, respectively. For tax

purposes, Eastman uses an accelerated depreciation method. This resulted in a tax benefit of

$100,000. For financial reporting purposes, Eastman uses straight-line depreciation. The

temporary difference because of the difference in depreciation will reverse in later years.

Eastman had pre-tax accounting income of $2.2 million. The tax rate is 40%

REQUIRED:

1. Compute taxable income for Eastman. Calculate income tax expense, any deferred tax

amounts, and income tax payable for 2021. Prepare the journal entry for 2021.

2. Prepare a partial income statement and balance sheet for 2021