E11-29B (Learning Objective 3: Account for income tax by a corporation) During 2012, Campbell Heights Corp.s income statement reported income of $300,000 before tax. The companys income tax return filed with the IRS showed taxable income of $260,000. During 2012, Campbell Heights was subject to an income tax rate of 25%. Requirements 1. Journalize Campbell Heights income taxes for 2012. 2. How much income tax did Florimax Heights have to pay for the year 2012? 3. At the beginning of 2012, Florimax Heights balance of Deferred Tax Liability was $38,000. How much Deferred Tax Liability did Florimax Heights report on its balance sheet at December 31, 2012?

E6- 32B Learning Objective 2: Compare ending inventory and cost of goods soldFIFO vs. LIFO) MusicMagic.net specializes in sound equipment. Because each inventory item is expensive, MusicMagic uses a perpetual inventory system. Company records indicate the following data for a line of speakers:

Date	Item	Quantity	Unit Cost	Sale Price
Sep 1	Balance	17	$59
Sep 3	Purchase	3	71
Sep 8	Sale	6		$118
Sep 12	Sale	7		107

Requirements

1.Determine the amounts that MusicMagic should report for cost of goods sold and ending inventory two ways:

a.FIFO

b.LIFO

2.MusicMagic uses the FIFO method. Prepare MusicMagics income statement for the month ended September 30, 2012, reporting gross profit. Operating expenses totaled $320, and the income tax rate was 35%.