Create your own Excel template to solve the following problem:

AAA inc. has a total cumulative temporary difference related to depreciation at December 31, 2017, of $630,000. AAA uses straight-line for book purposes and MACRS for tax purposes. This represents a $30,000 increase from the previous year. This temporary difference will reverse $42,000 in 2018, $294,000 in 2019, and $294,000 in 2020. Enacted tax rates are 30% for 2017, 34% for 2018 and 2019 and 40% thereafter. AAA had pretax financial income of $225,000 during 2017.

Required:

Prepare a schedule or schedules to compute taxable income, income taxes payable, and deferred taxes for 2017.

Prepare the journal entry to record income tax expense, income taxes payable, and deferred taxes for 2017.