PART I: ANSWER BOTH PROBLEMS. (26 POINTS EACH OR 52 TOTAL POINTS). A reconciliation of Sauder Company's pretax accounting income with its taxable income for 2014, its first year of operations, is as follows: 1. Pretax accounting income Excess tax depreciation Permanent difference (death benefit) $8,000,000 (240,000) (260,000) Taxable income $7,500,000 The excess tax depreciation will result in equal net taxable amounts in each of the next three years. Pretax accounting income increases by 10% in each year after 2014. Enacted tax rates are 40% in 2014, 35% in 2015, and 30% in 2016 and 2017 Required (a) Compute the total deferred tax liability (net of tax rate changes) to be reported on Sauder's balance sheet at December 31, 2014 (b) Create the journal entries required at 12/31/14, 12/31/15, 12/31/16 and 12/31/17 to record tax expense and taxes payable. PART I: ANSWER BOTH PROBLEMS. (26 POINTS EACH OR 52 TOTAL POINTS). A reconciliation of Sauder Company's pretax accounting income with its taxable income for 2014, its first year of operations, is as follows: 1. Pretax accounting income Excess tax depreciation Permanent difference (death benefit) $8,000,000 (240,000) (260,000) Taxable income $7,500,000 The excess tax depreciation will result in equal net taxable amounts in each of the next three years. Pretax accounting income increases by 10% in each year after 2014. Enacted tax rates are 40% in 2014, 35% in 2015, and 30% in 2016 and 2017 Required (a) Compute the total deferred tax liability (net of tax rate changes) to be reported on Sauder's balance sheet at December 31, 2014 (b) Create the journal entries required at 12/31/14, 12/31/15, 12/31/16 and 12/31/17 to record tax expense and taxes payable