During the year, ATTN's management team decided to start a new position in the company's accounting department, hiring a tax professional to work in-house for the first time. After reviewing the company's books, this new expert found that the company has not been properly recording deferred taxes. Specifically, she found the following book/tax differences in the company's books that need to be accounted for:

Interest payments received from investment in municipal bonds (not taxed): $59,163

Life insurance premiums paid during the year: $20,900

Life Insurance benefits received during the year: $63,000

Depreciation and amortization (Note that these numbers include the depreciation your recognized during the exam):

Year 5 Year 6 Year 7 Year 8

Under U.S. GAAP $492,650 $492,650 $492,650 $246,325

Under MACRS $569,000 $426,800 $320,100 $408,375

Also, keep in mind that the company 1) can only take a tax break for accounts receivable actually written off during the year and 2) must pay taxes on cash received as unearned revenues.

Prepayments (unearned revenues) earned during the year: $155,341

HINT: Since ATTN doesn't believe it's enacted tax rate will change in the near future, you can treat the differences that aren't broken down by year as if they will fully resolve in Year 6. Also, remember that you can find cash amounts received or paid using a t-account and the expense or revenue amount you already know!