Deferred Tax Asset and Liability Problem Sheet: Assume that Sales Company recognizes $15,000 gross profit from installment sales for financial accounting in 2005. The gross profit will be taxable at $3,000 each year for the next years including this year). The company earns $10,000 additional income each year and the tax rate is 40%. Prepare a schedule showing taxable income, income tax payable, financial income, and income tax expense for the five year period. Show journal entries for all five years Financial Magazine Company received $15,000 of subscriptions in advance for 2005. Subscription revenue will be recognized equally in 2006, 2007, and 2008, for financial accounting purposes but all of the $15,000 will be recognized in 2005 for tax purposes. There is additional income of S50,000 each year and the tax rate in 40%. Prepare journal entries for each year