P$18\mathrm{.}4$ The accounting income of Grace Corporation and its taxable income for the years $2023$ to $2026$ are as follows:

The change in the tax rate from $25\%$ to $30\%$ was not enacted until early in $2024.$

Accounting income for each year includes an expense of $$40,000$ that will never be deductible for tax purposes. The remainder of the

difference between accounting income and taxable income in each period is due to one reversing difference for the depreciation of

property, plant, and equipment. No deferred taxes existed at the beginning of $2023.$

Instructions

a$.$ Calculate the current and deferred tax expense or benefit for each of the four years. Also calculate the balance of the deferred tax

balance sheet account at the end of each fiscal year from $2023$ to $2026.$

b$.$ Prepare journal entries to record income taxes in all four years.

c$.$ Prepare the bottom of the income statement for $2024,$ beginning with the line "Income before income tax."

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