Please answer the following question:

The accounting income of Grace Corporation and its taxable income for the years 2017 to 2020 are as follows:

Year	Accounting Income	Taxable Income	Tax Rate
2017	$460,000	$299,000	25%
2018	420,000	294,000	30%
2019	390,000	304,200	30%
2020	460,000	644,000	30%

The change in the tax rate from 25% to 30% was not enacted until early in 2018.

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 2017.

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 2017 to 2020.

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

(c) Prepare the bottom of the income statement for 2018, beginning with the line Income before income tax.