he following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2010, its first year of operations. The enacted income tax rate is 30% for all years. Pretax accounting income$350,000 Excess tax depreciation (160,000) Litigation accrual 35,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 25,000 Interest received on government obligations (10,000) Taxable income $240,000

1.Excess tax depreciation will reverse equally over a four-year period, 2011-2014. 2.It is estimated that the litigation liability will be paid in 2014. 3.Rent revenue will be recognized during the last year of the lease, 2014. 4.Interest received on government obligations is expected to be $10,000 each year until their maturity at the end of 2014. Requirement (a)Prepare a schedule of future taxable and (deductible) amounts. (b)Prepare a schedule of the deferred tax (asset) and liability. (c)Since this is the first year of operations, there is no beginning deferred tax asset or liability. Compute the net deferred tax expense (benefit). (d)Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2010

03(20m):- The following differences.3 enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2010, its first year of operations. The enacted income tax rate is 30% for all .years Pretax accounting income$350,000 (160,000) Excess tax depreciation 35,000 Litigation accrual Unearned rent revenue deferred on the books but appropriately 25,000 recognized in taxable income Interest received on government (10,000) obligations $240,000 Taxable income Excess tax depreciation will reverse 1 .equally over a four-year period, 2011-2014 It is estimated that the litigation liability.2 will be paid in 2014 Rent revenue will be recognized during 3 the last year of the lease, 2014 Interest received on government.4 Prepare a schedule of future taxable (a) .and (deductible) amounts Prepare a schedule of the deferred tax (b) (asset) and liability Since this is the first year of operations, (c) there is no beginning deferred tax asset or liability. Compute the net deferred tax .expense (benefit) Prepare the journal entry to record (d) income tax expense, deferred taxes, and the income taxes payable for 2010 03120m) - The following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2010, its first year of operations. The enacted income tax rate is 30% for all years. Pretax accounting income$350,000 Excess tax depreciation (160,000) Litigation accrual 35,000 Unearned rent revenue deferred on the books but appropriately recognized in taxable income 25,000 Interest received on government obligations (10,000)