Nalad Corp. provided the following data related to accounting and taxable income:

20X8 20X9

Pre-tax accounting income (financial statements)$450,000 $465,000

Taxable income (tax return) 265,000 650,000

Income tax rate 40% 40%

There are no existing temporary differences other than those reflected in these data. There are no permanent differences.

Required:

1-a. How much tax expense would be reported in each year if the taxes payable method was used?

1-b. What is the implied tax rate?(Round your answers to 1 decimal place.)

2-a. How much tax expense would be reported using comprehensive tax allocation (liability method).

2-b.How much deferred income tax would be reported using comprehensive tax allocation (liability method).

2-c. Why is the two year total tax expense is the same under both tax payable method and liability method?